JPMorgan Chase & Co. has warned that global food inflation could rise significantly through 2027, driven by fertilizer supply disruptions, geopolitical tensions and weather risks.
The bank expects global food inflation to rise from 2.8% in the first half of 2026 to 5% in the first half of 2027.
Five Key Risks to Food Inflation
According to a JPMorgan report led by senior global economist Nora Szentivanyi, risks to global food supply can be seen through five main factors: war, weather, warehousing, water and waste.
Shipping disruptions in the Strait of Hormuz, along with the possibility of an El Niño, could potentially affect crop yields and reduce global agricultural production.
This risk is all the more important because the Middle East is one of the key regions in the world's fertilizer supply chain.
Strait of Hormuz Becomes Fertilizer Risk Point
Tensions around the Strait of Hormuz have the potential to disrupt global fertilizer supplies, particularly urea and potash.
Qatar and Iran account for around 9.3% and 8.4% of global urea exports in 2025, respectively.
Any disruption to shipments through these routes could potentially increase fertilizer costs, putting pressure on food production costs.
Meanwhile, the National Oceanic and Atmospheric Administration (NOAA) has estimated a 69% chance of an El Niño from October to December 2026.
The weather conditions could potentially affect key grain-producing regions in South Asia, Southeast Asia and Europe.
Grain supplies show mixed signals
USDA data showed global wheat ending stocks for the 2026/27 season were projected at 273.25 million tonnes, up slightly from the July forecast.
However, US wheat ending stocks are expected to fall 22% from a year earlier to 717 million bushels, due to lower production.
The difference suggests that global food markets are still well-supplied, but pressure on production in some regions could increase price risks going forward.
China Begins Supporting Local Farmers
China has also taken steps to support its agricultural sector as several provinces have begun activating grain purchase programs at minimum prices.
Jiangxi and Hunan are among the provinces that have activated the minimum purchase price plan for indica rice in early 2026.
As one of the world's top wheat and rice producers, China's agricultural policies have the potential to affect the balance of global food supply and demand.
At the same time, China previously agreed to buy at least $17 billion in US agricultural products annually until 2028 as part of a trade deal with the United States.
The risk of global food inflation will depend on a combination of fertilizer supplies, weather, crop production and geopolitical developments.
If disruptions in the Strait of Hormuz continue and the risk of El Niño materializes, agricultural input costs could rise, putting pressure on global food prices.
With JPMorgan expecting global food inflation to rise to 5% in the first half of 2027, the market will continue to watch developments in agricultural commodities, fertilizer and transportation costs as early indicators of food price pressures.
