Milk to pork: How the rising cost of food is sweeping around the world

 Food prices have always been cyclical, and most agricultural futures are now off their peaks from early May

The cost of feeding the world is the most expensive it’s been in years. The Food and Agriculture Organization’s food price index, which tracks a basket of grains, vegetable oils, meat, dairy, and sugar, rose to its highest level in a decade in May.

On the Chicago Mercantile Exchange, the prices of soybean oil are more than double what it was a year ago, while lean hogs and ethanol are up by about three-quarters. The same dynamic is affecting corn, palm oil, coffee, sugar, and a host of other commodities. Even the price of moving food around the world is surging: The Baltic Handysize Index, which tracks freight rates on the ships used for hauling grains between continents, is at levels last seen in 2008.

Food prices have always been cyclical, and most agricultural futures are now off their peaks from early May. Even the FAO's food price index fell marginally last month, after a year of back-to-back increases. Still, there’s reason to believe the current disruptions won’t disappear immediately as the world returns to pre-pandemic norms. China’s hunger for protein as incomes rise, combined with the lingering effects of African Swine Fever, isn’t going to disappear overnight. Moreover, even a short bout of food inflation can be damaging for the world’s poorest, who are rarely more than a few meals away from hunger.

Below, Bloomberg Opinion writers look at some of the reasons why the cost of food keeps rising.

Cooking oil: It’s unusual for a large country to develop a culinary culture divorced from local produce, though that’s just the paradox driving global trade in one food item: cooking oil. Indians, who have for millennia fried their samosas, parathas, and dosas, are also the world’s largest importer of liquid vegetable fat.

The unhealthy dependence has come to bite over the past year. The indigenous cooking mediums used in different parts of the country — mustard oil in the east and north, groundnut oil in western and central India, and sesame and coconut oil in the south — have all seen dramatic price increases following a 44 percent surge in their mostly imported substitutes. These include palm oil from Indonesia and Malaysia; soybean oil from Argentina, Brazil, and the U. S.; and sunflower oil from Ukraine and Russia.