The Zhitong Finance App notes that global food inflation is expected to accelerate in the next few months and continue until 2027, as shipping disruptions caused by war and the El Niño drought have squeezed grain supplies, putting additional pressure on vulnerable Indonesian consumers.
In Indonesia, rice prices have soared to record highs due to predictions of delayed rainfall; bread prices in Egypt have risen by a quarter; and sugar prices in India have reached record highs as the weakest monsoon in more than a decade suppresses production.
Maximo Torero, chief economist at the Food and Agriculture Organization of the United Nations (FAO), said, “All of this has put considerable pressure on the entire system.” “We'll see a bigger impact at the end of this year, early next year, and possibly throughout next year.”
As food prices rise sharply in low- and middle-income countries in the Middle East, North Africa, and Asia, the world's poorest consumers have been hit the hardest, as food accounts for a larger share of household expenses in these regions.
According to World Bank data, of the 150 countries it analyzed, 22% had food price increases in the September quarter that surpassed overall inflation, up from 14% in the previous quarter.
The FAO Food Price Index, which tracks monthly changes in a basket of internationally traded commodities, averaged 136 points in September, the highest reading since November 2022.
Higher prices have increased the risk of social unrest and may further exacerbate shortages by leading suppliers by imposing export bans.
Multiple supply shocks
Attacks on the Black Sea grain infrastructure disrupted wheat shipments, forcing top importers Egypt and Indonesia to find alternative supplies, while insecurity in the Red Sea forced ships to switch to farther and more expensive routes around Africa.
The war between the US and Israel against Iran has boosted fuel prices and disrupted fertilizer exports through the Strait of Hormuz, driving up agricultural costs, while arid weather caused by El Niño has reduced production in India and Southeast Asia.
Wheat prices rose by more than 30% in 2026, while rice prices in major Asian exporters rose 10% to 13% despite abundant stocks. Fertilizer prices have fallen from the high they hit in the early days of the Iranian war, but they are still high.
Manish Tiwari, chairman and managing director of Nestlé India, said, “Rising inflation, especially food inflation, is a reality.” He mentioned a “challenging environment” due in part to rising commodity costs.
In Egypt, the price of unsubsidized bread has risen from 4 Egyptian pounds per bar in July to around 5 Egyptian pounds (about 0.093 US dollars), while in the UAE, the price of cooking oil has risen by about 40%.
Although Indonesia is the world's largest producer of palm oil, its vegetable oil prices have risen 7% this year.
Prices of sugar, onions and beans in India rose more than 10% month-on-month in September due to insufficient production. As oil prices and war premiums soared, freight rates on key global routes such as the Black Sea to Southeast Asia increased by about 50%.
Inflation catalyst
Although food prices have been rising since late 2025, reduced local supply and higher commodity costs are transmitted to consumers and may accelerate inflation.
Major importers in the Middle East and Africa suspended procurement after strong local harvests and now need to return to the global market, which could trigger a surge in demand.
Alexander Karavaitsev, a senior economist at the International Grain Council in London, said, “In a few months, as importers return to the market, there may be a significant new wave of demand.”
According to FAO's Torero, the buffer provided by record global grain stocks is thinning. “Previous stocks and good harvests provided buffers, but these buffers are starting to weigh on.” He said, “This means that the increase in commodity prices is likely to become more pronounced.”
Food processors, who usually buy raw materials on three to six month contracts, are now renewing these contracts at higher prices, and the weakening of the local currency has further amplified the costs.
Franciscus Welilang, director of Indonesia's largest food company, Indofood (Indofood), said, “Shipping costs have also risen, and after converting to rupees, the depreciation of the Indonesian currency has further amplified the impact.”
Traders said that in addition to rising prices, food processors are also facing procurement difficulties.
An executive of a flour processing company in Jakarta, who did not wish to be named, said that due to the Russian-Ukrainian war, the operating rate of many wheat processing plants in Indonesia was insufficient. He requested anonymity because he was not authorized to speak to the media.
According to Kpler data, wheat arrivals in Indonesia plummeted 41% year over year to 491,000 tons in September.
Currently, stocks of soybeans and corn are abundant, and future supply depends on production in the US and South America, but rising oil prices have supported these two crops due to the expansion of their use in biofuels.
Karavajtsev of the International Grain Council said that wheat is expected to yield well in the southern hemisphere, and any downside risk in production in exporters such as Australia and Argentina may add a new bullish factor to prices.
“There is a significant upward risk in the price.” he said.