World Food Policy Volume/Issue 2-2/3-1 Fall 2015/Spring 2016 | Page 160

Food Security In an Age of Falling Commodity and Food Prices: The Case of Sub-Saharan Africa

sectors, especially energy; and a faster
transmission of macroeconomic factors
onto commodity markets, including
exchange rate volatility and monetary
policy shifts, such as changing interest
rate regimes.

Furthermore, financial firms are
progressively investing in commodity
derivatives as a portfolio hedge because
returns in the commodity sector seem
uncorrelated with returns to other assets.
Evidence suggests that trading in futures
markets may have amplified volatility in
the short term.

Falling Food Prices and Food
Security in SSA
The Food Security Situation

I

n SSA, fewer than one in four (or
23.2% of the population) are likely to
be undernourished in 2014–2016.

This is the highest prevalence
and the second in absolute terms, as the
region has ~220 million people suffering
from hunger in 2014–2016. In fact, the
number of undernourished people has
increased by 44 million between 1990–
1992 and 2014–2016, despite the decline
in the prevalence of undernourishment,
which reveals the strength of the growth
rate of the population (2.7% per year).

Figure 6: Undernourishment around the world,
Source: FAO; State of Food Insecurity 2015

160