FAO Warns of New Food Price Inflation Wave by End of 2026

The United Nations Food and Agriculture Organization (FAO) has issued a warning about a potential new wave of global food price inflation. According to Máximo Torero, Chief Economist of the FAO, a 'perfect storm' is brewing due to ongoing wars in Ukraine and Iran, combined with the expected strengthening of the El Niño weather pattern.

Torero explained that higher crude oil prices, disruptions to fertilizer supplies from the Gulf region, diesel shortages, and increasingly extreme weather are steadily raising agricultural production costs. As it typically takes three to six months for commodity price increases to reach consumers, food prices are expected to rise by the end of this year.

The FAO believes that farmers across many regions are operating with increasingly tight profit margins due to rising production costs. For example, some growers in the United States are shifting from corn to soybeans because soy requires less fertilizer, while Australia expects winter crop production to decline by 21% due to higher fuel and fertilizer costs.

Another major risk is the expected strengthening of El Niño, which could significantly alter global rainfall patterns. India is already experiencing delayed monsoon rains and below-average precipitation, posing risks to rice production.