Food Price Surge Imminent as Crude Oil Prices Soar

The world is bracing for a fresh surge in food prices, according to a warning from the UN agency. Despite relatively benign prices so far this year, higher crude oil prices and supply chain disruptions are expected to feed through to costs, affecting consumer prices. 'I expect that commodity prices will start to increase more now... and food prices will start increasing by the end of the year, and next year for sure they will increase more,' Maximo Torero told Reuters.

The main culprits behind the impending price hike are higher crude oil prices, the loss of fertilizer from the Persian Gulf region, diesel shortages in some parts of the world, and extreme weather. 'The Strait of Hormuz is a problem that affects all the inputs of agricultural commodities, agricultural systems,' Torero said.

The damage inflicted by Ukraine on Russia's oil and gas infrastructure has curtailed the export market for diesel and natural gas, both key inputs in food production. Commodity prices are global, meaning this will inflict pain across the world, even if richer countries have more cash to buffer producers.