Global Food Prices Climb Toward Arab Spring-Era Highs Amid Trade War Turmoil

Global food prices surged to a two-year high in April, driven by U.S. tariff policy uncertainty that has injected turmoil across markets. The latest spike brings prices dangerously close to levels that helped fuel the Arab Spring uprisings across the Middle East and North Africa between 2010 and 2012.

The Food and Agriculture Organization of the United Nations (FAO) reported on Friday that its Food Price Index—which tracks monthly changes in international prices of globally traded food commodities—averaged 128.3 points in April, up 1% from March and 7.6% from the same month last year.

The Food Price Index (FFPI) subcomponents, including cereals, meat, and dairy, mainly were up, while vegetable oils and sugar were down. 

Here’s a breakdown of how FFPI’s subcomponents performed in April:

• Cereals: Up 1.2% from March; wheat rose on tighter Russian exports, rice up on demand for fragrant varieties, maize higher due to low U.S. stocks.

• Meat: Up 3.2%; pig meat led gains, bovine prices firmed in Australia and Brazil on strong demand and limited supply.

• Dairy: Up 2.4%; butter hit an all-time high due to declining inventories in Europe, dairy index now 22.9% higher year-over-year.

• Vegetable Oils: Down 2.3%; palm oil fell with rising Southeast Asian output, soy and rapeseed oil up on strong demand, sunflower oil steady.

• Sugar: Down 3.5%; decline driven by fears of weakened demand from beverage and food sectors amid uncertain global economic outlook.

At 128.3, the FAO said FFPI moved to a two-year high on “currency fluctuations influencing price movements in world markets, while tariff policy adjustments raised market uncertainty.” 

Those prices are nearing 2010-12 Arab Spring levels…

Bloomberg quoted Monika Tothova, an economist at the FAO, as saying that short-term demand for some ag products has been visible amid the tariff war between President Trump and China.

The lingering question is whether the FFPI will continue rising amid tariff uncertainty—or if potential signaling around new trade talks between the U.S. and China suggests this price surge may be temporary. Still concerning is the level at which prices linger and how higher food prices can trigger social destabilization in weak countries.