UN FAO: Food Prices to Rise Until End of 2027

Why are food prices about to rise again?

The United Nations Food and Agriculture Organization (FAO) is sounding the alarm: a new wave of global food inflation is building, driven by three overlapping crises — the Iran-Israel war, the ongoing conflict in Ukraine, and the agricultural disruption caused by El Niño. FAO chief economist Máximo Torero told Reuters that commodity prices are already edging up, and the full impact will hit supermarket shelves by late 2026 and into 2027.

How long before higher commodity prices reach consumers?

Torero explains that the transmission from commodity markets to the price tag on your groceries typically takes three to six months. "I believe commodity prices will start rising more now, and food will become more expensive by the end of the year. Next year the increase will certainly be even larger," he said.

What is driving up agricultural production costs?

Several factors are converging: rising oil prices, reduced fertilizer supply from Gulf-region producers, diesel shortages in parts of the world, and extreme weather events linked to El Niño. Together, these pressures are pushing up the cost of growing and transporting food globally.

Why does the Strait of Hormuz matter for your grocery bill?

Torero specifically flagged the Strait of Hormuz, through which a significant share of the world's oil and natural gas passes. Brent crude is used in water pumping, packaging, food processing and transport. Natural gas, also routed through the strait, is essential for fertilizer production. Ukrainian attacks on Russian oil and gas infrastructure have further reduced the exportable supply of diesel and natural gas — two key agricultural inputs.

What does this mean for Brazil?

Brazil is a major agricultural exporter, but domestic consumers are not immune. Wheat, corn and rice prices have already risen in recent months, though they still reflect good recent harvests. The harder impacts are expected in the next agricultural cycle. With commodity prices set globally, Brazil's food basket will feel the pressure regardless of local production levels.