JP Morgan Warns of Global Food Price Surge by 2027

JP Morgan has warned that food and beverage prices in India may increase significantly by 2027. The multinational financial services firm estimates that inflation will have a global impact, with prices potentially rising by up to 5% in the first half of next year.

The crisis is predicted to deepen due to a combination of factors, including a fertilizer shortage, geopolitical tensions, and the arrival of an El Niño storm. According to JP Morgan, there's an 81% chance that a super El Niño will occur by the end of 2026, which could extend until 2027.

The impact on India is expected to be particularly severe due to the country's reliance on imported fertilizers. The government currently bears the cost of a ₹3 lakh crore subsidy for these imports, and this burden may increase further if the Middle East crisis persists.

JP Morgan warns that a fertilizer shortage could lead to crop damage in India, with a potential 3.5% decline in yields. This, in turn, could drive up food prices worldwide by approximately 1.5%. The firm notes that natural gas is essential for making fertilizers, and if its price increases, the cost of production will rise.