Global Food Inflation Set to Surge to 5% in First Half of 2027, JPMorgan Warns

According to Economic Information Daily, JPMorgan Chase has released a new research report forecasting a notable rise in global food inflation. The bank projects the global food inflation rate will climb from 2.8 per cent recorded in the first half of this year to 5 per cent in the first half of 2027, signalling that the next major global inflation pressure will stem from grocery markets rather than energy fuel prices.

Titled Food Security Is National Security: A Compounding Storm, the report outlines overlapping risks that will sustain elevated food prices through the first half of 2027. Disruptions to shipping traffic in the Strait of Hormuz triggered by Middle Eastern conflicts, coupled with potential crop yield declines driven by a strong El Niño event, will jointly disrupt agricultural production and supply chains worldwide.

The lead economist behind the research states that global crop prices have not yet peaked, as logistical disruptions hinder the transportation of fertilisers and other essential agricultural inputs. Ongoing global energy market shocks will amplify the inflationary impact brought by the super El Niño phenomenon on food commodities. The upward food price trend is expected to push the overall global inflation rate 0.6 percentage points higher in the first half of 2027.

Emerging market economies will bear the most severe impacts from the upcoming food inflation surge. Agricultural production in parts of Asia, Africa and Latin America is more vulnerable to extreme weather fluctuations, and food expenditure accounts for a larger share of household consumption in these regions. These structural characteristics leave such economies more exposed to food price volatility and systemic inflationary pressure.

Vulnerable groups facing pre-existing food shortages will require targeted support to cope with the evolving food crisis. Global food insecurity data shows that around 645 million people worldwide experienced hunger last year, while 2.1 billion people faced moderate to severe food insecurity, accounting for 25.8 per cent of the global population.

Multiple authoritative institutions have issued early warnings over rising global food prices. The Food and Agriculture Organization of the United Nations recorded a month-on-month increase in its global food price index for July, marking the strongest growth since January 2023. Goldman Sachs and HSBC have also released successive reports reminding global markets and economies to prepare for persistent upward pressure on international food prices.