Why Are Food Prices Going Up?

With the harsh reality of this world, nothing gets easy as some find it hard to even put food on the table. The price of goods has skyrocketed as we speak and with the current pandemic, it's not going to go down any time soon.

We are used to seeing everything going up at once concerning the supply chain. If a decade ago you can get a cup of coffee for merely 50 cents well now might be different as it might have gone up by more than 3 fold.

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So what is the root cause for this price increase and why is it keep going up with no end to it? Here are 5 top reasons why food prices are going up.

1. Increase in The Price of Crude Oil

Surveys have been conducted by several experts and it has been shown that the price of food from 2007 until 2016 was closely related to the price increase of crude oil. The increase in crude oil price will directly affect the cost of transportation and this will also give an impact on the price of food. 

So this is one of the main reasons why you see that the price of food kept on increasing and simply never goes down.

2. The Weakness of The Currency

A report by the United Nations Conference on Trade and Development showed that the change in the value of a currency is one of the factors for the price increase. If we were to look at Venezuela as an example, we can see how inflation has resulted in an immense price increase in food.

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The situation is so bad that you can only get a burger for one month of wage in Venezuela. Inflation will result in the price of all imports rising and this will automatically increase your cost of living as the currency becomes weak in value.

3. High Increase in Demand

Based on the law of economics, the higher the demand the higher the price will be. This also applies to food too since the raw supply is very limited and becoming scarce. More people exist as time goes on and this too results in an increase in demand.

For instance during the Covid 19 pandemic when everyone bought facemasks and hand sanitizers to the extent that most of them were sold out. The prices also increase by more than twofold due to a high increase in demand.

4. Greed is Good?

The desire for money and wealth has resulted in most businesses becoming very greedy by increasing their products without the knowledge of their customers. This usually happens to essentials that are bought daily and well food is also essential.

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When the supply in their shops is low, they will simply rise up the price as they wish without having a slight thought of its impact. This is sometimes the reason that most people will overlook but preventing it is not easy either.

5. Natural Disaster

This is something out of our hands but if it happens for a long period of time, it will affect the supply chain of the production of raw materials. Consequently, the supplier will not be able to keep up with the demands resulting in the price increase of the raw materials. 

That's why it is of utmost importance that an agreement is achieved among the customers, businesses, and local authorities to ensure that everything is as it should be. If not, the end consumer like us will be the ones to suffer

Source: 

• The Balance

• Majalah Labur

Also read: A&W History That Not Many Knows