By Ukumbi Afrika Wednesday, August 5, 2026
Abuja–The world could be heading into another wave of food inflation as geopolitical conflicts, rising energy costs and extreme weather combine to drive up agricultural production expenses, the United Nations Food and Agriculture Organization (FAO) has warned.
FAO Chief Economist Máximo Torero said food prices are expected to begin climbing towards the end of 2026 and rise further in 2027 as the effects of higher commodity costs gradually reach consumers.
Speaking to Reuters, Torero said the current period of relatively stable food prices is unlikely to last, with rising crude oil prices, fertilizer shortages, diesel supply disruptions and climate-related shocks creating mounting pressure on global food systems.
"I expect that commodity prices will start to increase more now, and food prices will start increasing by the end of the year. Next year, they will increase more, " Torero said.
He noted that food price transmission from agricultural commodities to supermarket shelves typically takes between three and six months.
Rising Production Costs
The conflict involving Iran has disrupted supply routes through the Strait of Hormuz, a critical passage for oil and fertilizer-related inputs used across global agriculture.
Higher Brent crude prices are increasing the cost of irrigation, processing, packaging and transportation, while tighter natural gas supplies are raising fertilizer prices worldwide.
At the same time, continued attacks on Russia's energy infrastructure linked to the Ukraine conflict have reduced exports of diesel and natural gas, further tightening supplies of key agricultural inputs.
Although wheat, maize and rice prices have risen in recent months, markets are still largely reflecting previous harvests rather than the production challenges expected during the next planting season.
Farmers Under Pressure
FAO warned that shrinking profit margins are already influencing planting decisions across major agricultural producers, including Europe, the United States, Brazil and parts of Asia.
In the United States, the American Farm Bureau Federation estimates producers of nine major crops could collectively lose about $32 billion in 2027 without additional government support, with every major crop projected to remain below breakeven levels on a per-acre basis.
Higher fertilizer costs have already encouraged some American farmers to shift acreage from corn to soybeans, which require fewer nutrient inputs.
Australia has also forecast a 21% decline in winter crop production, citing sharply higher fuel and fertilizer costs alongside uncertainty over access to agricultural supplies.
El Niño Adds Fresh Risks
The FAO also warned that a stronger-than-normal El Niño weather pattern could significantly worsen food inflation by disrupting rainfall across key farming regions.
India's delayed and below-average monsoon rainfall is already raising concerns over rice production, potentially affecting global grain supplies and prices.
The agency cautioned that prolonged climate disruptions could push tens of millions of people into acute food insecurity, particularly across vulnerable developing economies.
With geopolitical tensions, climate risks and rising production costs converging, analysts expect food inflation to become an increasingly important challenge for policymakers and central banks over the coming year.
Consumers may not yet be feeling the full impact, but FAO believes higher food prices are likely to become more visible from late 2026 as increased production costs move through global supply chains.
Source: Reuters
Reporting: Balazs Koranyi
Editing : Mark John& Tomasz Janowski