International Food Prices, Poverty and Hunger

Climate change, conflicts and the COVID-19 pandemic have the common effect of putting pressure on international food markets, consequently raising global food prices and potentially affecting the poor. Given the scarce empirical evidence, the study discusses and models the relation of changes in food prices with poverty and hunger. More specifically, the paper analyzes a sample of 117 developed and developing countries observed in the period 1990–2020 and estimates the relation of food price shocks with variations in the income of the poorest shares of population and in the prevalence of various forms of deprivation and hunger. It finds important impacts for developing countries’ population and, more precisely, it estimates that an increase in food prices has negative effects on the income of the lowest percentiles and deciles; interestingly, such effects are larger for the poorest among the poor. Similarly, the prevalence of poverty and hunger is positively affected by spikes in food prices, especially when these materialize in developing countries. Results do not seem to be driven particularly by cereals prices, but they seem instead to stem from the joint effect of different commodities’ prices.