Specialty Food News - Climate Change Squeezes Supplies, Pushes Prices - Specialty Food Association
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Climate Change Squeezes Supplies, Pushes Prices
Rising average annual temperatures and shifting weather patterns as a result of climate change are reducing crop yields, effectively squeezing supplies and contributing to food inflation, reports Financial Times.
The Energy and Climate Intelligence Unit contends that roughly 33 percent of food price increases in the U.K. in 2023 alone resulted from climate change.
“There’s a material impact from climate change on global food prices,” says Frederic Neumann, chief Asia economist at HSBC. “It’s easy to shrug off individual events as being isolated, but we’ve just seen such a sequence of abnormal events and disruptions that, of course, add up to climate change impact.” He added that these repeated events equate to “a permanent impact on the ability to supply food.”
Food price rises once considered temporary are becoming a source of persistent inflationary pressure, said the report.
A study by the European Central Bank and the Potsdam Institute for Climate Impact Research found that global annual food inflation rates could rise by up to 3.2 percentage points per year over the next decade because of higher temperatures.
Some of the staple crops most likely to suffer from higher annual temperatures include rice, soybeans, corn, and potatoes, said the report.
“They have pretty stable productivity up to temperatures between 20C and 30C, depending on the crop,” says Friderike Kuik, an economist, who led the ECB study. “Beyond that, we see quite sharp [yield] declines.” Full Story(Subscription Required)
Related Knowledge Center: Climate economics
Climate change is now a driver of the world’s economy. The impact is profound:
- Catastrophic weather events — hurricanes, floods, droughts, high temperatures — are more frequent and more extreme. The cost can be measured in both the initial damage caused and the longer-term impact on the economy.
- Vulnerable communities are increasing climate-related investments, hardening infrastructure and taking other protective measures.
- Investment in carbon capture and storage technologies is increasingly rapidly.
- Governments are making investments and crafting regulations to reduce emissions of carbon dioxide and other greenhouse gases.
On top of all of this is the cost of uncertainty. As the Fourth National Climate Assessment, released in 2018 by the U.S. Global Change Research Program, says, “The assumption that current and future climate conditions will resemble the recent past is no longer valid.”