In the weeks following the outbreak of the COVID-19 pandemic, costs of most of the food items found on the shelves of US grocery stores rose based on anticipated shortages of such items that might result from transportation and logistical problems that followed the shutdown of many parts of the economy. There wasn't so much a shortage of goods to go on the shelves as there was an anticipated interruption in the "just in time" delivery supply line that keeps such products moving from processes to wholesalers, wholesalers to distributors, and distributors to retailers.  As those disruptions were solved — or didn't happen as feared in many instances — consumer goods and staples reappeared on the store shelves without much difference from the pre-pandemic pricing.

But warning bells are starting to be heard about another impending shortage of consumer goods and food staples as wholesale prices of certain raw materials used in a wide variety of food preparations have risen sharply over the past several weeks. This steady upward price pressure is coming at a time when many fragile economies around the world are not in a position to handle a sharp rise in the cost of food for their populations.

Soaring raw material prices have broad repercussions for households and businesses, and threaten a world economy trying to recover from the damage of the coronavirus pandemic. They help fuel food inflation, bringing more pain for families that are already grappling with financial pressure from the loss of jobs or incomes. For central banks, a spike in prices at a time of weak growth creates an unwelcome policy choice and could limit their ability to loosen policy.