Recently, global food prices have continued to rise even though there is no obvious shortage in production. The latest data from the UN Food and Agriculture Organization shows that the global food price index in September hit its highest level since November 2022. At the same time, global cereal production in 2026 is still expected to reach about 2.979 billion tonnes, only slightly below the record high of 2025. Why are global food prices still rising when total output is sufficient? What impact does this situation have on global food stability? How does it affect the living costs of ordinary consumers in various countries?

Why food prices are rising

From a short-term perspective, the driver of current food price increases is not in the fields, but on the routes. Shipping disruptions in the Black Sea and the Strait of Hormuz have tightened local supply and amplified fluctuations in international food prices. The Black Sea is a key corridor for global grain exports. Wheat transported through the Black Sea accounts for about 25% to 30% of global export trade, corn for more than 10%, and sunflower oil for two-thirds. Affected by geopolitical tensions, port conflicts and ship attacks in the region occur frequently, seriously disrupting grain shipments. Andrey Sizov, executive director of the market research firm SovEcon, believes that the Black Sea situation has a more severe impact on the global wheat market than the shipping blockage in the Strait of Hormuz has on the crude oil market. The FAO also explicitly lowered its forecast for global cereal trade this year because of the Black Sea situation.

In addition, the slow recovery of shipping through the Strait of Hormuz not only affects oil, but also raises fertilizer, logistics and insurance costs, which are transmitted to agricultural products and further intensify global food price volatility. Many analysts worry that current shipping uncertainty could trigger chain reactions such as panic buying, stockpiling and rerouting, causing even deeper shocks. Between 2007 and 2008, global food prices rose, and some exporting countries restricted exports to ensure domestic supply, further worsening price volatility. Therefore, even though global food production and inventories are at relatively high levels and provide a buffer against climate change and other sudden factors, supply chain uncertainty is still greatly amplifying price fluctuations.

Why expectations are weakening

Compared with other commodities, the biggest peculiarity of agricultural products is their long production cycle and many influencing factors. Take sugar prices as an example. Recently, expectations of lower output in Thailand, insufficient rainfall in India and heavy rain in south-central Brazil have all tightened supply expectations, driving a 6.1% price increase in September. It can be seen that what the international market trades is not only how much agricultural product there is today, but also how much there may be tomorrow. Although current agricultural output has not shown an obvious decline, global media are generally focused on how a strong El Nino phenomenon will bring changes in global rainfall and temperature distribution, thereby affecting agricultural production and triggering market anxiety to some extent. ING previously analyzed that the risk of El Nino worsening shocks to global food supply may be overestimated, because its impact on global agriculture is uneven, and the regional risks it triggers are clearly higher than global risks. In addition, current global food production and inventories can provide some buffer. However, market sentiment has not eased because of such analysis. Observers say climate risk has changed medium- and long-term expectations for food output, triggering market price fluctuations and further affecting purchasing and inventories. Moreover, combined with the current tense geopolitical situation, the exposure to food security risks has expanded, causing market prices to react much earlier than actual declines in food production. The Financial Times recently published an article saying that the continuation of the Middle East conflict, global trade disruptions and El Nino are increasingly making food and energy external factors affecting global inflation. In the face of inflation caused by such shocks, traditional monetary policy cannot solve the substantive problem, and improving supply chain resilience is crucial.

How consumers are affected

Food security is not only about whether there is food to eat, but also about whether people can afford it and eat well. From the broader environment, the world today does not lack food. Rather, with production and inventories relatively sufficient, factors such as broken supply chains, geopolitical conflicts and climate change are continuously increasing the cost of moving food from producing areas to dining tables, and may ultimately be reflected in the daily bills of ordinary consumers in relevant countries. The FAO food price index measures the prices of a basket of major food commodities on the international market, and it is not equal to the final retail food prices paid by residents in various countries. The transmission of international food prices to consumers still goes through multiple links such as transportation, energy, processing, storage and retail. FAO chief economist Torero warned that if current supply chain and energy cost pressures persist, costs may be further passed on to consumers, especially those in countries that are highly dependent on food and energy imports. Historical experience shows that consumers in low-income countries often bear relatively greater pressure. In these countries, food accounts for a higher share of total consumption, and rising food prices put greater pressure on people's livelihoods. For these countries, a single price fluctuation in the international market may be amplified through import bills, exchange rates and domestic logistics. Research by the World Bank and other institutions shows that food price shocks may make low-income countries and poor households more likely to fall into or fall back into poverty, and have long-term effects on child nutrition and human capital accumulation. The impact of rising food prices does not stop at the numbers on supermarket shelves, but may extend to a family's education, medical care and other basic living expenses.