Global food inflation set to worsen as supply disruptions mount

Global food prices are expected to rise further in the coming months and remain under pressure into 2027 as shipping disruptions, higher fertiliser costs and weather-related production losses threaten supplies.

The growing pressure is affecting consumers across Asia, the Middle East and North Africa, where many households spend a significant portion of their income on food. Rising prices are forcing low-income families to cut spending on essential items and reduce their daily meals.

In Indonesia, rice prices have reached record levels amid concerns over delayed rainfall and tighter supplies. The cost of wheat has also increased, while sugar prices in India have climbed to new highs following a weak monsoon that affected production.

In Egypt, the price of unsubsidised bread has risen by around 25% since July, while cooking oil prices in the United Arab Emirates have increased by approximately 40%. Indonesia has also recorded higher vegetable oil prices despite being the world’s largest palm oil producer.

The United Nations’ Food and Agriculture Organization has warned that the pressure on food supplies could intensify towards the end of 2026 and continue throughout next year. Its Food Price Index averaged 136 points in September, marking its highest level since November 2022.

Several factors are contributing to the rising costs. Attacks on grain infrastructure in the Black Sea region have disrupted wheat shipments, while insecurity in the Red Sea has forced vessels to take longer routes, increasing transportation expenses.

Meanwhile, the US-Israeli war on Iran has pushed up fuel costs and disrupted fertiliser exports through the Strait of Hormuz. These developments are increasing expenses for farmers and food producers at a time when drought linked to El Niño conditions is threatening agricultural output in parts of India and Southeast Asia.

Global wheat prices have risen by more than 30% in 2026, while rice prices in major Asian exporting countries have increased by 10% to 13%. Although fertiliser prices have eased from their earlier peaks, they remain elevated.

Food manufacturers are also facing higher production costs, including electricity, water, transport and raw materials. The weakening of local currencies in some importing countries has further increased the cost of purchasing commodities from international markets.

The situation could deteriorate as countries that relied on domestic harvests begin returning to global markets to replenish supplies. Economists warn that renewed demand from major importers could push prices higher as existing grain stockpiles lose their ability to absorb supply shocks.

Although favourable wheat harvests in the Southern Hemisphere could help ease pressure, any production shortfalls in major exporting countries such as Australia and Argentina could trigger further increases.

The continued rise in food prices is raising concerns about food security, particularly for vulnerable households. Analysts also warn that prolonged inflation could increase the risk of social unrest and encourage exporting countries to impose restrictions on overseas sales, potentially worsening shortages in international markets.