It was the eggs. That’s what Bernardo Vega noticed first. The price for eggs shot up 50% in just weeks, he said.
Wholesale prices of vegetables, fruits and dairy products in Mexico have fluctuated wildly since the coronavirus crisis hit, said Vega, who has managed a vegetable stand at Mexico City’s Mercado Medellin for 20 years.
“Up and down, up and down,” he said.
But most of the prices are going in one direction: up.
For Mexicans living paycheck-to-paycheck, rising food prices coupled with lost incomes because of stay-at-home measures are forcing many to make tough choices. Some are limiting what foods they eat, or are deciding between putting food on the table and paying for other necessities.
The trend of rising food costs is playing out across the world because of a combination of disrupted supply chains, natural harvest cycles that affect prices, plummeting currencies and limits on key exports. Experts worry that the longer the coronavirus crisis lasts, the bigger the food problem will become — creating a perilous cycle of uncertainty, supply, demand and — eventually — hunger.
The spread of the coronavirus has sparked “the worst humanitarian crisis since World War II,” said David Beasley, executive director of the World Food Program. The United Nations warns that the coronavirus could push 130 million people to “the edge of starvation.”
“I have a lockdown. I have confinement. And all this means added cost, added cost until it reaches the customers,” said Abdolreza Abbassian, senior economist with the UN’s Food and Agriculture Organization, adding that there is “tremendous amount of uncertainty across the world. This uncertainty is very dangerous.”
In Mexico, lemons, chiles, tomatoes — all Mexican staples — have roughly doubled in price in the past three weeks alone, said Esperanza Reséndiz, who cleans houses for a living. Since the lockdown, she’s been delivering home-cooked meals to her clients instead of cleaning their homes.
“Bottom line — prices are rising,” she says.
One main driver of these price hikes may be price gouging, says Ricardo Sheffield, who oversees Mexico’s consumer watchdog agency. The agency is now suing merchants caught raising their prices exorbitantly.
“First,we started looking at very large retailers. Then medium-sized retailers. Now we find out that the main problem is in very small retailers. But we are working at it,” Sheffield said.
Add to that higher costs for imported food. Global food prices are set in dollars, and the local currencies of many developing countries — including Mexico, Brazil, India and Indonesia — have plummeted in the past few weeks.
That makes imports for these countries much more expensive, and extra costs are passed down to the consumers.
“The standard price is paid, always, in dollars. And if there is a devaluation or the rate of exchange is not advantageous for Mexico, then we end up paying more for rice,” Sheffield said.
Some countries are also limiting exports on key goods. Russia, which is a top wheat exporter, is exporting less of the grain to make sure it has enough to supply the country's own people. That’s contributing to rising wheat prices worldwide.
The US food market is going through convulsions, too. Like in Mexico, egg prices were among the first to spike. Still, price hikes will hit people in developing, land-locked countries hardest.
“Food is not at the forefront [of people’s minds now]," Abbassian said. “But if it goes unattended and we don’t do something about it, we will have a major food problem from both a supply and demand angle."