As Reuters reports, the FAO’s global price index, which tracks globally-traded commodities in the food industry, has fallen for the fifth straight month, from 140.7 points in July to 138 points in August. The index hit a record high in March at 159.7, predicated largely by the Russian invasion of Ukraine and the disruption caused to the major food exporting nation and its ports.
The reopening of many of those ports, says the FAO, is a large part of the reason the price index has been falling. Coupled with that has been a strong wheat harvest in the northern hemisphere, notes the University of Illinois’ Farm Policy News, but that could be tempered in coming years by lackluster harvests due to the ongoing fertilizer shortage and its effects on crop yield.
How might the global food system be made more resilient and sustainable? In a commentary in Pensions & Investments magazine, David Sheasby puts forward that it is up to the asset management industry and banking sector to incentivize innovations that “improve crop production, develop alternative proteins and build supply-chain resilience.”