FAO Warns Wars and El Niño Are About to Squeeze Global Food Prices Again
The UN Food and Agriculture Organization’s chief economist says the world is on the verge of another food inflation surge as wars in Iran and Ukraine combine with El Niño-driven weather shocks. For import-dependent countries and low‑income households, a new spike in prices would revive the trade, subsidy, and stability pressures many hoped were fading after the last crisis.
A familiar anxiety is returning to global food markets: the fear that war and weather could once again make basic staples unaffordable for millions.
On August 5, the chief economist of the UN Food and Agriculture Organization (FAO) warned that the world is nearing another bout of food inflation, driven by the combined impact of conflicts in Iran and Ukraine and the El Niño climate pattern. He described a “perfect storm” of higher production costs, disrupted trade and lower crop yields that could push prices sharply higher.
The FAO warning does not yet come with specific price forecasts, but the ingredients it cites are concrete. In Ukraine, a major exporter of wheat, corn and sunflower oil, Russian attacks on ports, grain storage and energy infrastructure have repeatedly interrupted export flows since 2022. More recently, Ukrainian sources say a blockade has severely reduced ship movements near key Black Sea ports, with satellite imagery reportedly showing minimal large-vessel traffic to hubs like Illichivsk (Chornomorsk). That translates into less grain leaving the country and more uncertainty for buyers who depend on predictable flows.
At the same time, conflict in and around Iran is raising insurance costs and risk premia for vessels transiting nearby chokepoints, including the Strait of Hormuz — a vital corridor not only for oil but for some food and fertilizer shipments. Reports of a large fire on vessels in the strait, possibly linked to an IRGC strike, have reinforced insurers’ and shipowners’ sense that the route is becoming more hazardous. Even limited disruptions can cascade into higher freight costs, which feed directly into the final price of food in ports from East Africa to South Asia.
Layered onto this is El Niño, the warming of the central and eastern Pacific that alters weather patterns worldwide. While the FAO economist did not detail specific regional impacts in his latest comments, El Niño events are historically associated with droughts in some key grain and rice producers and floods in others. For farmers operating on thin margins and governments reliant on stable harvests, the combination of erratic rainfall, higher fertilizer prices and uncertain export routes is a dangerous mix.
For ordinary households, especially in import-dependent countries in the Middle East, North Africa and parts of Asia, the stakes are immediate. Food budgets that had only just begun to stabilize after the price spikes of 2022–23 are again exposed. For governments, the risk is not just humanitarian but political: rising bread and cooking oil prices have a track record of sparking protests, eroding trust and forcing costly subsidy schemes that strain public finances.
Agricultural traders, shipping firms and insurers are already navigating this tightening landscape. Even without a formal blockade, vague threats to shipping or occasional strikes in corridors like the Black Sea and Hormuz can be enough to delay sailings, reroute vessels and raise premiums. Food security, in other words, can be undermined not just by a shortage of grain, but by a surplus of risk.
The FAO’s warning fits a broader pattern in which food markets remain a frontline victim of geopolitical rivalry and climate stress. Wars that interrupt fertilizer exports or close off grain terminals, sanctions that complicate financing and insurance, and weather extremes that slash yields are no longer isolated shocks; they increasingly arrive together.
One sentence captures the core danger: the world does not need an outright blockade of grain to face a food crisis — it only needs enough uncertainty to convince farmers to plant less, traders to hesitate, and governments to start hoarding. The next critical signals will be harvest and export data from major producers, any escalation that affects shipping lanes near Iran and Ukraine, and how quickly donors and multilateral lenders move to bolster vulnerable importers before the next price spike lands on dinner tables.
Sources
- OSINT