Article By Frank Bergman
One of the world’s largest banks is warning that a new global food crisis could be on the horizon as mounting geopolitical tensions and extreme weather threaten to drive food prices sharply higher.
A new report from JPMorgan Chase warns that disruptions to global fertilizer supplies, combined with a potentially historic El Niño weather event, could ignite a fresh wave of food inflation that ripples across the global economy.
The warning comes as conflicts in the Middle East continue to threaten key shipping routes and governments scramble to secure food supplies before shortages worsen.
According to the report, authored by senior global economist Nora Szentivanyi and released on Aug. 15, global food inflation is projected to accelerate from 2.8% during the first half of 2026 to 5% during the first half of 2027.
JPMorgan estimates the surge would add roughly 0.6 percentage points to headline inflation worldwide, undermining efforts by central banks to bring rising prices under control.
Fertilizer Supply Under Threat
JPMorgan identifies what it calls the “Five Ws” driving the emerging crisis: War, Weather, Warehousing, Water, and Waste.
The bank warns that one of the greatest vulnerabilities lies in the global fertilizer supply chain.
The Middle East is a major supplier of potash and urea, two critical agricultural fertilizers.
Any prolonged disruption to shipping through the Strait of Hormuz could send fertilizer prices soaring, increasing costs for farmers while reducing crop yields in future harvests.
Szentivanyi warned that today’s geopolitical instability could dramatically amplify the impact of a powerful El Niño event.
According to the report, the combination of energy shocks and extreme weather could more than double the historical inflationary impact of a super El Niño.
JPMorgan estimates global food prices could rise by approximately 1.5 percentage points under such a scenario, compared with the historical average increase of about 0.7 percentage points.
The greatest impact is expected to fall on rice, sugar and coffee production across South and Southeast Asia, cocoa production in West Africa, and agriculture across parts of East and Southern Africa.
China Moves to Protect Grain Supplies
As concerns mount, Chinese authorities have already begun intervening in agricultural markets.
Jiangxi and Hunan provinces activated minimum purchase price programs for early indica rice on Aug. 5.
Henan province followed on Aug. 11 by introducing similar support measures for wheat.
The state-backed price floors are designed to shield farmers from falling crop prices while offsetting rising production costs.
Analysts say the measures are intended to prevent what they describe as a “vicious transmission chain” that could evolve into a broader agricultural crisis.
Investor concern has already become visible in financial markets.
China’s grain sector rallied sharply on Aug. 17, with multiple seed and rice companies reaching their daily trading limits.
Since the beginning of 2026, soybeans, corn, wheat and rice have all rebounded after earlier declines, with corn posting the strongest gains.
Global Food Markets Flash Warning Signs
JPMorgan’s warning echoes similar concerns raised by other major financial institutions, including Goldman Sachs and HSBC.
The report also comes after the U.N. Food and Agriculture Organization reported that its global food price index climbed to a three-year high in July.
According to the report, approximately 645 million people experienced hunger during 2025, while an estimated 2.1 billion people faced moderate or severe food insecurity.
JPMorgan identifies several economies as particularly vulnerable to another food price shock, including India, Indonesia, Brazil, Colombia, Taiwan and South Korea.
Separately, Bank of America analyst Robert Ohmes has warned that supermarket prices could begin rising again later this year as higher labor, transportation and commodity costs work their way through the supply chain.
Inflation Threat May Shift From Gas Pumps to Grocery Stores
JPMorgan warns that years of supply chain disruption, geopolitical instability and agricultural shocks have left the world’s food system increasingly fragile.
With shipping through the Strait of Hormuz facing continued uncertainty and El Niño conditions expected to strengthen, the bank argues that food security is rapidly becoming a national security issue for governments around the world.
If current trends continue, the next major inflation shock may not come from energy markets.
Instead, consumers could feel it every time they walk into a grocery store.
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