Food Price Hikes Loom as Wars, El Niño, and Oil Prices Bite

The United Nations Food and Agriculture Organization (FAO) is warning of a new wave of food price hikes due to various factors. The FAO's chief economist, Máximo Torero, stated that the war in Iran and Ukraine, along with the El Niño phenomenon, are creating conditions for higher costs and lower crop yields.

Torero expects commodity prices to rise soon, with food prices increasing by the end of the year and even more next year. The process of transmission from commodities to final food prices takes between three and six months, according to Torero.

The factors contributing to the expected price hike include high crude oil prices, fertilizer shortages from the Gulf region, diesel shortages in some parts of the world, and adverse weather conditions. These will impact costs and ultimately be reflected in consumer prices, even if delayed.