Global Food Prices Set to Surge Amid War, El Nino, and Energy Shortages

The world is on the verge of another bout of food inflation due to various global events, according to Maximo Torero, chief economist of the United Nations Food and Agriculture Organization. Wars in Iran and Ukraine, along with El Nino, have created a perfect storm of higher costs and lower crop yields.

Food prices were a key driver of the 2022 global inflation surge but have been relatively benign so far this year. However, Torero expects commodity prices to increase more now, leading to food price increases by the end of the year and next year for sure.

The Strait of Hormuz is a major problem affecting all agricultural commodities, and Brent oil and natural gas are also being impacted due to damage inflicted by Ukraine on Russia's oil and gas infrastructure. This will have global consequences, including in Europe, the U.S., Brazil, and Asia.