War-related shipping disruptions, rising fertiliser costs and El Niño-linked drought are threatening food supplies, with rice, sugar and bread prices climbing in several countries and vulnerable households facing mounting pressure through 2027.
Global food inflation is expected to intensify in the coming months and persist well into 2027 as supply disruptions, higher agricultural costs and adverse weather threaten food production and trade, putting additional pressure on household budgets across developing economies.
From Indonesia to Egypt and India, rising prices of essential food items are already affecting consumers. Declining grain stockpiles, more expensive shipping and fertiliser, and the potential return of major food-importing countries to international markets could further tighten supplies and push prices higher.
In central Jakarta, 63-year-old parking attendant Muhamad Yasin said he had reduced his food consumption as the cost of basic meals rose beyond his reach.
“I used to be able to get rice, tempeh and tofu for 7,000 to 8,000 rupiah ($0.39 to $0.44). Now it’s 15,000 rupiah,” he said. Yasin earns between 200,000 and 300,000 rupiah a week while supporting a family of four.
His experience reflects the growing pressure on low-income households, particularly in countries where food accounts for a substantial share of household expenditure.
The World Bank reported that food-price inflation outpaced headline inflation in 22% of the 150 countries it assessed during the September quarter, compared with 14% in the previous quarter.
The United Nations’ Food and Agriculture Organization (FAO) Food Price Index averaged 136 points in September, its highest level since November 2022, according to the figures cited in the report.
FAO Chief Economist Maximo Torero warned that the impact of current supply pressures could become more pronounced towards the end of 2026 and continue through 2027.
“We will see a bigger impact towards the end of the year, at the beginning of next year and potentially throughout next year,” Torero said.
Rice, sugar and bread prices climb across major markets
Food-price pressures are already evident in several large emerging economies.
In Indonesia, rice prices have reached record highs amid concerns about delayed rainfall, while vegetable oil prices have increased by 7% this year despite the country’s position as the world’s largest palm oil producer.
The country’s food processors are also facing supply difficulties as disruptions to wheat shipments linked to the Russia-Ukraine war affect imports. Data from commodities analytics firm Kpler showed that Indonesian wheat arrivals fell 41% year on year to 491,000 metric tonnes in September.
In India, sugar prices reached record levels as a weak monsoon constrained production. Prices of sugar, onions and pulses rose by more than 10% in September compared with August, reflecting supply shortfalls.
Egypt has also experienced higher food costs. The price of unsubsidised bread has risen to around five Egyptian pounds for a large loaf, up from four pounds in July. In the United Arab Emirates, cooking oil prices have climbed by approximately 40%.
For Egyptian baker Sayed Abdel Hamid Mohamed, rising production costs extend beyond flour to include labour, electricity, water, yeast and other ingredients.
The increases are particularly challenging for lower-income households, which have limited flexibility to absorb higher food bills without reducing consumption or cutting spending elsewhere.
War-related disruptions raise shipping and farming costs
Several overlapping geopolitical and economic pressures are contributing to the deteriorating outlook for food prices.
Attacks on grain infrastructure in the Black Sea region have disrupted wheat shipments, forcing major importers, including Egypt and Indonesia, to seek alternative supplies.
Insecurity in the Red Sea has diverted vessels onto longer routes around Africa, increasing transport times and freight costs. Shipping rates on some key routes, including those connecting the Black Sea with Southeast Asia, have risen by around 50% as fuel prices and war-related insurance premiums increase.
The conflict involving the United States, Israel and Iran has also raised energy costs and disrupted fertiliser exports through the Strait of Hormuz, adding pressure to agricultural production.
Fertilisers are essential for maintaining crop yields, and sustained increases in their prices can influence planting decisions, production costs and the affordability of food in subsequent harvest cycles.
Although fertiliser prices have fallen from peaks reached earlier in the Iran war, they remain elevated.
Wheat prices have risen by more than 30% in 2026, while rice prices in major Asian exporting countries have increased by 10% to 13%, despite relatively large inventories.
Nestlé India Chairman and Managing Director Manish Tiwary said rising inflation, particularly food inflation, remained a reality for businesses operating in a challenging environment shaped partly by higher commodity costs.
El Niño threatens agricultural output
Weather-related risks are adding another layer of uncertainty to global food supplies.
Forecasts of El Niño-linked dry conditions have raised concerns about agricultural production in India and Southeast Asia, where rainfall patterns are important for rice and other major crops.
Reduced rainfall can affect crop yields, limit water availability and increase competition for agricultural resources. If production falls below expectations, domestic markets may face additional pressure, particularly where government stocks or alternative import supplies are insufficient.
The effects could extend beyond individual commodities. Lower harvests in major producing countries may increase international demand for supplies from other exporters, transmitting price pressures across markets.
The extent of the impact will depend on the severity and duration of adverse weather, the performance of upcoming harvests and the ability of producers and governments to respond.
Returning importers could intensify competition for supplies
The outlook is also being shaped by changing purchasing patterns among major food-importing countries.
Some importers in the Middle East and Africa delayed purchases after strong domestic harvests and the availability of existing stocks reduced their immediate need for overseas supplies. As local inventories diminish, these countries may return to international markets in greater numbers.
Alexander Karavaytsev, a senior economist at the International Grains Council in London, warned that a new wave of demand could emerge within months.
“In a couple of months, there could be a significant new wave of demand as importers return to the market,” he said.
Such a shift could increase competition for available grain, particularly if shipping constraints and production shortfalls persist.
FAO Chief Economist Torero said inventories accumulated during previous seasons had helped cushion markets against supply disruptions, but that protection was coming under pressure.
“Stocks and good harvests in previous seasons have provided a buffer, but those buffers are starting to come under pressure,” he said. “That means commodity price increases could become more pronounced.”
The weakening of these reserves could leave markets more sensitive to further disruptions, including poor harvests, transport interruptions or unexpected changes in import demand.
Food manufacturers face higher costs and weaker currencies
The impact of rising commodity prices is spreading through food-processing industries as companies renew purchasing contracts at higher rates.
Processors that typically buy raw materials under three- to six-month contracts are increasingly exposed to higher replacement costs. Currency depreciation can further increase the local-currency cost of imported commodities, fuel and fertiliser.
Franciscus Welirang, a director of PT Indofood, Indonesia’s largest food company, said higher shipping costs were adding to the pressure, with the weakening rupiah amplifying the impact when overseas expenses were converted into local currency.
Supply availability is also becoming a concern. Industry representatives have reported that some Indonesian wheat mills are operating below capacity because of reduced cargo arrivals.
For manufacturers, higher costs can squeeze profit margins or lead to increases in retail prices. The eventual impact on consumers depends on the degree to which companies absorb costs, adjust production or pass increases along the supply chain.
Global supplies offer some relief, but risks remain
Not all commodities face the same immediate pressures.
Soybean and corn inventories remain relatively ample, although future supply conditions will depend partly on production in the United States and South America.
Higher oil prices have also supported demand for both crops because of their use in biofuels, creating another connection between energy markets and agricultural commodity prices.
Upcoming wheat harvests in the Southern Hemisphere could help ease pressure if production is strong. However, any deterioration in output from major exporters such as Australia and Argentina could add further upward pressure to prices.
Karavaytsev said the market faced significant upside risks, particularly if supply disruptions coincided with stronger import demand.
The balance between harvest performance, global inventories, freight costs and purchasing activity will therefore remain central to the food-price outlook.
Poorer households face the greatest risks
Rising food prices have consequences beyond the cost of individual commodities. For households already spending much of their income on basic necessities, even modest increases can force difficult choices involving food quality, meal frequency, healthcare, education and other essential expenses.
Governments may also face pressure to expand food assistance, maintain subsidies or restrict exports to protect domestic consumers. However, export restrictions imposed by major suppliers can reduce the amount of food available to international buyers, potentially worsening shortages and increasing prices elsewhere.
The coming months will test the resilience of global food supply chains as geopolitical tensions, weather risks, higher production costs and diminishing stock buffers converge.
For consumers such as Yasin in Jakarta, the consequences are already tangible. For food-importing countries and vulnerable households worldwide, the risk is that rising prices could become more entrenched if supply fails to keep pace with demand.
