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Reports from the Food and Agriculture Organization (FAO) indicate that a new wave of global food price inflation is approaching, due to the coinciding factors of the Iran and Ukraine wars, the El Niño phenomenon, and rising energy and fertilizer costs. Food prices are expected to begin rising by the end of 2026 and continue to increase throughout 2027, as input prices such as fuel and fertilizers are affected, leading to reduced agricultural production and higher prices. The risks are heightened by disruptions in trade through the Strait of Hormuz, which accounts for about 35% of global oil, gas, and fertilizer trade, with implications for increased crop production costs. It is also forecasted that global grain production will decline by 1.9% in 2026. Additionally, the El Niño phenomenon is expected to cause widespread droughts and climate changes, further increasing the risk of crop shortages and intensifying food insecurity, especially in the most affected countries.
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