How Indian households can navigate the coming global food crisis

Indian households are facing challenging times amidst the ongoing global food crisis. The continued Russian-Ukraine conflict in the aftermath of the pandemic continues to play havoc with food and fertilizer prices.?Recently food and fertiliser prices have fallen from their peaks. However, both remain at historical highs, because Russia and Ukraine are major food exporters, and Russia and Belarus are major fertiliser producers. The geopolitical situation remains tense. Moreover, volatile oil prices and increasingly uncertain weather have raised the cost of producing and transporting food, as a result managing monthly groceries has become more challenging than ever.

According to the Food and Agriculture Organization of the United Nations (FAO), the World Food Price Index reached a high of 160 points in 2022 following the invasion of Ukraine in February 2022. Although the Index has fallen to 127.2 points in April 2023, the rising trend of food prices is evident when considering the mean of the index over the last three decades. The Index mean has risen from 66 points in the 1990s to 73 points in the 2000s and 107 points in the 2010s.

Since the beginning of the 21st century, there have been three major global food price hikes - in 2007-08, 2010-11 and 2021-22. As per this month’s?World Bank’s Food Security Update, between January and April, inflation levels were greater than 5 percent in 64.7 percent of low-income countries, 83.7 percent of lower-middle-income countries, and 89 percent of upper-middle-income countries, with many experiencing double-digit inflation.

The inflationary impact of rising food prices has been particularly strong in emerging markets like India, where food constitutes a significant part of the consumption basket. The Consumer Price Index (CPI), the gauge for inflation in India, hit a 18-month low of 4.7% in April 2023.

The Union Ministry of Finance has warned that food prices will rise in 2023 due to various reasons: extreme weather events and the looming?El Nino?being the prime ones to?impact harvests. Already, ground frost and a cold wave in January has affected the mustard crop in Rajasthan. Unseasonal rain between March and May has delayed the harvest of wheat in Punjab and Haryana and hit ginger supply in Lucknow. Hailstorms in Himachal Pradesh damaged wheat and barley crops, and fruit trees. The 2023 southwest monsoon season isn’t just likely to arrive slightly later than previously predicted, but its overall performance could also be more subdued than what former forecasts had indicated.

The combination of high food prices, slow income growth, and disruptions in food supply is a recipe for social discontent and potential economic repercussions. To manage the current food crisis, the Food and Agriculture Organization of the United Nations has recommended action points for countries, including keeping international trade in fertilisers open, increasing market transparency, promoting smart and precision farming practices, minimizing disruptions to global trade in fertilisers, ensuring access to fertilisers for vulnerable countries, and enhancing market and policy transparency.

So, how can Indian households manage their monthly groceries during the global food crisis? Here are 9 tips:

1. Shop smart: Compare prices, look for discounts, and buy in bulk when possible to save money. For example discount retailers in India like DMart and JioMart offer considerable savings on groceries. Consider purchasing cheaper or generic brands, and avoid unnecessary processed or convenience foods that tend to be more expensive. Focus on buying nutritious and staple foods like grains, fruits, vegetables, and proteins.
2. Reduce food waste: Be mindful of food waste and try to minimize it. Plan meals using leftovers, use perishable items before they spoil, and store food properly to extend their shelf life. Avoid overbuying or hoarding, as it can lead to unnecessary waste and increased costs.
3. Cook at home: Cooking at home is generally more cost-effective than eating out or ordering takeout. Learn basic cooking skills and prepare meals from scratch to save money and have control over the ingredients and portions.
4. Prioritize essentials: Prioritize essential food items over luxury or non-essential items. Focus on meeting basic nutritional needs rather than indulging in expensive treats or snacks. Consider substituting expensive ingredients with more affordable alternatives without compromising on nutrition e.g. expensive saffron can be substituted with a combination of rose water and a pinch of turmeric.
5. Stay informed: Stay updated on the latest news and developments related to food prices, supply chain disruptions, and government policies. Stay informed about market trends, global events, and local factors that may affect food prices and availability.
6. Budget wisely: Create a budget specifically for your monthly groceries and stick to it. Track your expenses, identify areas where you can cut costs, and prioritize your spending on essential food items. Avoid impulse buying and unnecessary expenses to make the most of your budget.
7. Plan ahead: Plan your meals in advance and make a grocery list based on your meal plan. Stick to your list while grocery shopping and avoid impulsive purchases. Planning ahead can help you avoid last-minute purchases, reduce food waste, and stay within your budget.
8. Optimize storage: Proper storage of your groceries extends their shelf life and minimize spoilage. Use airtight containers, store perishable items in the refrigerator, and be mindful of expiration dates.
9. Explore alternative options: Consider exploring alternative options for food sourcing, such as growing your own vegetables. Certain herbs, fruits, and?vegetables?can thrive even in an apartment garden.

In conclusion, navigating the global food crisis can be challenging, but with careful planning, budgeting, and smart shopping, Indian households can manage their monthly groceries effectively. Remember to adapt your strategies as the situation evolves and continue to prioritize financial prudence and sustainability in your food consumption habits.

Source: world bank blog, moneycontrol.com, BBC

Author: Ashish Joseph George, MMS, CFP. The views shared in this article are my personal views and don’t reflect the views of any organization. This is not an investment advice