IMF warns of risk of new surge in global food prices

The International Monetary Fund (IMF) has warned that a likely strengthening of the La Niña weather phenomenon in the fourth quarter could reverse the current downward trend in global food prices.

The risks are related to droughts or floods in key producing regions and possible export restrictions, the IMF’s October World Economic Outlook said.

It noted that from March to August 2025, the IMF’s food and beverage price index fell by 4.8%. Coffee, grains and sugar made the biggest contributions – the fall in prices for these products was due to record harvests and weaker demand.

In particular, grains fell by 11.1% due to high forecasts and harvests in the United States, Brazil and Argentina. Coffee lost 16.7% after the harvest prospects in Brazil improved and amid uncertainty about US tariff policy. Corn prices fell 11.9% on a record Brazilian harvest in the second quarter and favorable weather in the United States.

Short-term trade disruptions led to a rebound in prices in August after Washington imposed new tariffs on Brazil. The effect turned out to be temporary, but showed the market’s sensitivity to trade decisions.

The IMF warns that cooling of the Pacific Ocean’s surface waters during the La Niña phase could shift the supply balance due to weather anomalies. An additional inflationary risk is export restrictions that reduce international supply even with low domestic prices in exporting countries.

According to FAO, the food price index in September 2025 was 128.8 points – 0.7% lower compared to August (129.7 points). The figure is 3.4% higher than in September 2024, but 19.6% lower than the peak in March 2022.

Tags: prices