FAO warns of food inflation surge

The United Nations' Food and Agriculture Organization (FAO) reported that global food prices hit a three-year high in July 2026, driven by adverse weather, conflicts in Iran and Ukraine, and disruptions to energy and fertilizer supplies. The FAO Food Price Index averaged 131.1 points in July, up from 130.3 in June, with the Cereal Price Index rising 3.4% month-on-month and wheat prices jumping 5.8%. FAO Chief Economist Máximo Torero Cullen warned that commodity prices will increase further and food prices will rise by the end of the year and into 2027, as higher crude oil prices, fertilizer shortages, diesel supply disruptions, and extreme weather feed through to consumer costs. The conflict in the Gulf, particularly around the Strait of Hormuz, threatens agricultural inputs, while Ukraine's damage to Russia's oil and gas infrastructure curtails diesel and natural gas exports. The American Farm Bureau Federation projected U.S. farmers could lose $32 billion in 2027 without federal assistance, and Australia forecast a 21% drop in winter crop production. A strong El Niño–Southern Oscillation is expected to disrupt rainfall patterns, potentially pushing tens of millions into acute food insecurity, with India's delayed monsoon posing risks to rice production. The International Fund for Agricultural Development (IFAD) warned that conflicts and energy disruptions could push an additional 9-18 million people into hunger, with Africa emerging as the epicenter of food insecurity.