Global Food Prices Set to Surge Amid War, Weather Disasters

The global food price surge is looming, according to the UN's Food and Agriculture Organization. The chief economist of the organization, Maximo Torero, expects commodity prices to rise soon, leading to higher food costs by the end of this year and next. This comes after a relatively calm period in 2026, despite high energy costs.

War in Iran and Ukraine, combined with El Nino weather phenomenon, have created a 'perfect storm' for higher food prices. The loss of fertilizer from the Gulf region and diesel shortages will also contribute to rising costs. These factors will take several months to affect consumer prices, but Torero believes they will eventually show up.

Some commodity prices, such as wheat, maize, and rice, have already increased in recent months, but these are largely due to good harvests rather than anticipated difficulties. The Strait of Hormuz is a major problem affecting agricultural commodities, particularly due to the use of Brent oil and natural gas for fertilizers and processing.

Even in the US, which is self-sufficient for most key inputs, farmers may lose $32 billion in 2027 without federal assistance. Global wheat and corn planting has already been cut in response to the Iran war, with some producers shifting to soya beans due to lower fertilizer requirements.