Home Market Inflation: how financial speculation is making the global food price crisis worse

Inflation: how financial speculation is making the global food price crisis worse

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By Sophie van Huellen, University of Manchester 

As in many other countries, UK households struggle to make ends meet. More than half of households have only £2.66 per week left after paying for bills and essentials, according to figures from the supermarket chain Asda.

This shift is largely due to the extreme rises in food and energy costs we have seen this past year. The Office for National Statistics reports that basic grocery prices increased by 17% compared to last year. Some products, such as pasta, have experienced an average increase of 60%. This is due to the fact that staple food crops like wheat have seen their prices rise by more than 30% in the past year.

The drivers of these soaring prices are multiple: Russia’s war on Ukraine (a major wheat exporter), the effect of extreme weather on harvests, and pandemic-era supply chain bottlenecks that are still being felt due to ongoing lockdowns, labour shortages and loss of capacity by producers.

These supply factors are not the only reason for recent price movements. Bumper grain harvests have been reported by China in 2021 and the US in 2022, and the UN’s Food and Agriculture Organization (FAO) predicts a “comfortable…



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