Food Prices

Cocoa bean prices have been rising since the last quarter of 2023, hitting a record high of $10.97 per kilogram on April 19 (Figure 1). The price spike is due to a significant drop in bean production by major global suppliers—four key producing nations in West and Central Africa account for more than 60% of the world's supply of cocoa beans: Cote d’Ivoire (with 38% of the global production in 2022), Ghana (19%), Nigeria (5%), and Cameroon (5%).1

Malawi is facing a severe drought crisis linked to the El Niño climate phenomenon. On March 23, President Lazarus Chakwera declared a state of disaster in 23 of Malawi’s 28 districts in anticipation of a poor harvest and appealed for more than $200 million in humanitarian assistance.

Cocoa bean prices have climbed to record nominal levels over the past six months, more than doubling since August 2023 (Figure 1). This price spike has largely been driven by weather-related diseases that have reduced cocoa production in key West African countries accounting for almost three quarters of world supplies.

During 2021 and 2022, global food and fertilizer prices spiked due to several overlapping factors. Demand rose as the world economy emerged from the COVID-19 recession; global supply chains suffered major disruptions associated with the uneven recovery; and the outbreak of war between Russia and Ukraine—both key food and fertilizer producers—generated yet another shock.

Achieving efficient and effective fertilizer usage in agricultural production is a critically important economic and environmental policy objective for countries at all stages of economic development, although the nature of the policy problem may vary radically in different contexts.