According to recent UN report, India could stand to lose nearly $49 billion (Rs. 3 lakh crore) crore in GDP if global food prices double in the future. The report stated that due to rising population and climate change, food commodity prices could potentially become more volatile. India will incur second highest loss after China, which is estimated to lose nearly $161 billion of the country’s GDP.
Volatile Food Prices
The report from the UN Environment Programme-Global Footprint Network, stated that “In the future, the world will likely suffer from higher and more volatile food prices as a result of a growing imbalance between the supply of and demand for food. Rising populations and incomes will intensify the demand for food, while climate change and resource scarcity will disrupt food production.” The report studied the impact of global food prices on 110 countries and assessed the potential economic risk countries might face due to the imbalance.
According to the report, the risk is assessed by a country’s net food trade and the share of average household spending on food. Several countries in Africa could potentially be impacted much more than other countries if food commodity prices double. Agricultural powers such as the United States, Canada, Australia and Brazil stand to lose less comparatively to other emerging markets like China.
According to UNEO Director, Achim Steiner, the fluctuations caused by the imbalance of demand and supply of food could potentially impact the economy of several countries. “As environmental pressures mount, it is important to anticipate the economic impact of these stresses so that countries and investors can work on mitigating and minimising risk. And as the global population continues to rise, food prices can be a bellwether for how environmental risk translates to economic risk and vulnerability,” added Steiner.