Global food prices could rise further in 2027 amid increasing fertiliser and farming costs, coupled with potential El Niño-related weather disruptions, with the impact likely to become more evident over the coming months; however, the full impact on food will take time to appear, according to a report by S&P Global.
The report warned that an exceptionally strong El Niño could threaten agricultural production across major crop-producing regions, while shortages of fertiliser and diesel continue to put pressure on farmers. “Unlike changes in oil prices , which register immediately, the full impact on food will take time to appear.
Farmers buy seed, fertiliser and fuel months before they sell a crop,” it said, stressing, “The squeeze now bearing down on farm budgets may therefore not reach food markets in force until 2027.”
“The impact on food will likely become much more apparent over the next few months as farmers wrestle with high costs and with shortages of fertiliser and diesel. To describe it further, the report noted, global agriculture is facing pressure from rising fertiliser and energy costs, growing demand for biofuels and potential El Niño-related weather disruptions. It highlighted that fertiliser production depends heavily on natural gas, while diesel is essential for operating farm machinery, irrigation systems and transporting agricultural produce. What is unfolding is not a single agricultural shock, but the convergence of several shocks. Conflict is moving through fertiliser, energy and biofuel markets, raising costs and narrowing farmers’ choices just as an extreme El Niño threatens harvests.
“Commodities other than the basic staples will be affected by the El Niño, including cash crops that are important to livelihoods in many poorer regions,” it noted.
