| As worries about the impact of tariffs on the economy and consumer demand persist, there’s a sliver of good news on the horizon: The World Bank expects food commodity prices to actually drop. It sees prices declining 7% this year and another 1% next year, particularly as grain costs ease. The decrease will also be underpinned by lower energy prices, the bank said in a flagship report this week. Surging energy prices added more than 2 percentage points to global inflation in 2022, raising the cost of producing food, though declines since then have helped lower inflation. A softening in food prices should also help curb food insecurity “at the margin,” providing some support to humanitarian efforts, especially amid shrinking humanitarian funding, World Bank economists said. It still won’t be enough to address the underlying drivers of acute hunger, which are largely rooted in conflict, they said. The United Nations expects that acute food insecurity in some of the worst-hit areas globally will intensify this year. The outlook for food prices also contrasts somewhat with what’s happening right now. The UN on Friday said that its gauge of global raw commodity costs of food reached a two-year high in April, a sign that tariff uncertainty is putting a squeeze on trade. Data this week also showed food inflation climbed in countries including the UK and Kenya. And in a continuation of the theme from last week’s newsletter, there have been yet more signs of weak consumer sentiment and trade-war anxiety. Kraft Heinz, the maker of ketchup and Oscar Mayer hot dogs, trimmed its annual sales and profit outlook. Weaker confidence is causing Americans to tighten budgets and dine out less, and McDonald’s saw US sales fall sharply in the first quarter. The slump in consumer sentiment also contributed to weak results at Chipotle Mexican Grill and Starbucks. Wholesale food distributor Sysco lowered its outlook too. —Agnieszka de Sousa in London | 
