Global food inflation intensifies amid declining grain shipments and rising logistics costs

Global food prices could rise at a faster pace towards the end of 2026 and remain under pressure throughout 2027 due to disruptions in international grain shipments, higher logistics costs and unfavorable weather conditions, attacks on grain infrastructure in the Black Sea region, shipping disruptions in the Red Sea and drought associated with El Niño are increasing the risk of reduced food supplies. Maximo Torero, Chief Economist of the United Nations Food and Agriculture Organization (FAO), warned that the most significant impact of these factors could emerge towards the end of this year and the beginning of next year.

Global wheat prices have risen by more than 30% since the beginning of 2026, while rice prices in major Asian exporting countries have increased by 10–13% despite substantial inventories. In September, the FAO Food Price Index reached 136 points, its highest level since November 2022. According to the World Bank, food inflation exceeded overall inflation in 22% of the 150 countries surveyed in the third quarter of 2026, compared with 14% in the previous quarter. Rising food prices are having the greatest impact on low- and middle-income countries, particularly in the Middle East, North Africa and Asia.

High transportation, fuel and fertilizer costs are placing additional pressure on global food markets. Security risks in the Black Sea and Red Sea are forcing shipping companies to change routes and account for higher insurance expenses. On certain routes, particularly from the Black Sea region to Southeast Asia, ocean freight rates have increased by approximately 50%. Meanwhile, military operations involving Iran and disruptions to shipments through the Strait of Hormuz have pushed up energy costs and complicated fertilizer exports. Although fertilizer prices have declined from their previous peaks, they remain elevated, increasing production costs for farmers.

Major importing countries are already feeling the effects of reduced grain shipments. In September, wheat imports into Indonesia fell by 41% year-on-year to 491 thsd tons, according to Kpler data. Due to raw material shortages, some local flour mills are operating below capacity. In Egypt, the price of a large loaf of unsubsidized bread increased from 4 to 5 Egyptian pounds, while unfavorable weather conditions in India have led to significant price increases for sugar, onions and pulses. Rice and vegetable oil prices are also rising in Indonesia, putting additional pressure on consumers.

Experts warn that a further increase in prices could be triggered by major importers returning to the global grain market after a period of limited purchasing. According to Alexander Karavaytsev, Senior Economist at the International Grains Council (IGC), a new wave of demand could emerge in the coming months. Meanwhile, grain inventories accumulated following strong harvests in previous seasons are gradually losing their ability to cushion price pressures. Although corn and soybean supplies remain sufficient for now, future market developments will depend on harvests in the US and South America, as well as wheat production in Australia and Argentina. A deterioration in production forecasts in these countries could create additional upward pressure on grain and food prices in 2027.

Tags: prices, food inflation, global market