Why is food becoming more expensive?


FULL VIDEO


You might not realise, but your typical shopping list contains more grains and cereals than you think. Whether it’s bread, milk, meat, pasta ... what you are eating today is probably linked to the grain market.


Now, the grain market works like any other market. If there is less grain available, it becomes more expensive. When the prices of grain change, the rest of the food market changes with it. And something pretty important has happened to the grain market recently.


Russia and Ukraine benefit from the ideal ecological conditions to produce grain. Their proximity to the Black sea makes them strategic locations for exportation and their government policy has facilitated grain production. More than a quarter of the world’s grain comes from Russia and Ukraine. Before the war, Ukrainian grain would have made it to the ports and shipped across the world. A big chunk of its manpower was focused towards its harvest. Today, Ukrainian ports are bombarded, and manpower is needed at the frontlines. Producing and exporting grain has been made harder for Ukraine. Meanwhile the rest of the western world is reluctant to trade with Russia. The world is suddenly facing a lack of supply of grain. Malta, like any other country, is already paying the price.


We’ve all heard it and we all know it by now. We can no longer buy pastizzi at 40c. The price has increased to 50c. And it’s not just pastizzi. It’s all food. The link between grain and some food items might not be obvious. For example, grain is used to feed animals. This means that raising these animals has become more expensive for farmers which is why the price of food items such as milk, eggs and meat itself is increasing. We call the increase in prices of goods, inflation.


Malta is particularly vulnerable to inflation. With almost no local cereal, grain or wheat production, we rely on the importation of our food from abroad. This is where we used to get our grains and cereals from before the war. Together with Russia and Ukraine, countries like Hungary, Poland, Romania also played an important role. However, seeing the turmoil and the potential food crisis, these countries are limiting how much wheat they export.

Food prices have been increasing from even before the war, and the reason for this is COVID-19. Grain leaving from Poland or Romania must go through many steps before arriving in Malta. The grain needs truck drivers to transport it from the fields to the nearest port. Once it arrives at the port, it is then shipped to Malta in a container. Shipping and trucking costs have increased as countries reopened after months of COVID-19 lockdowns. Pent up demand caused a shortage of containers and truckers across the world.


All of these issues compounded are the reason why Malta, like all countries in the world, is currently experiencing abnormal levels of inflation. Food inflation is particularly worrying as it disproportionately affects the poor. Everybody needs and consumes roughly the same amount of food. However, the poor spend a much larger share of their income on food than those better off. On its part, the government has already intervened by helping importers find cheaper solutions and subsidizing the increases in flour prices, but with a possible global food crisis on the horizon, it may be that our pastizz will cost more than 50c in the near future.


Sources

https://timesofmalta.com/articles/view/maltas-top-wheat-importer-warns-countries-may-stop-all-exports.939654

https://timesofmalta.com/articles/view/millions-allocated-to-keep-flour-prices-stable-robert-abela.951913

https://newsbook.com.mt/en/inflation-hits-4-5-in-march-as-food-prices-rise/

https://lovinmalta.com/news/sphinx-owner-inflation-means-pastizzi-now-cost-50c-and-they-could-rise-to-60c-soon/

https://www.maltatoday.com.mt/news/election-2022/115763/prime_minister_guarantees_a_steady_supply_and_price_stability_of_food#.YlAFz8BBydY