The chief economist of the Food and Agriculture Organization (FAO), Maximo Torero, confirmed that the world is on the brink of a new wave of food price inflation, as the wars in Iran and Ukraine, along with the El Niño phenomenon, are factors setting the stage for rising costs and declining crop yields.
Torero said in an interview with "Reuters": "I expect that the rise in commodity prices will start significantly now... and food prices will begin to increase by the end of the year, and they will certainly rise more next year."
He added: "The process of transferring the impact from raw materials to final food prices takes between three to six months."
Despite the increase in prices of some commodities, such as wheat, corn, and rice, in recent months, most still reflect relatively good harvests rather than potential difficulties next year.
Torero noted: "The Strait of Hormuz is a problem affecting all commodity inputs and agricultural systems... Brent crude because it is used in pumping, packaging, processing, and transportation, and natural gas because it is used in fertilizer manufacturing."
The damage inflicted by Ukraine on the oil and gas infrastructure in Russia has also diminished the export market for diesel and natural gas, both of which are key inputs in food production.
Since global commodity prices are linked, suffering occurs around the world even if wealthier countries have more cash flow to support producers.
Wheat and corn cultivation has already declined worldwide in the first three months of the U.S. war on Iran, with some U.S. producers shifting to soybean cultivation as it requires less fertilizer.
The El Niño climate phenomenon is likely to be very strong this year, leading to significant changes in rainfall patterns, which will likely affect commodity prices and push tens of millions into a state of acute food insecurity.
The seasonal monsoon rains in India have already been delayed, and the expected rainfall this month is predicted to be below average, which could harm rice production and, in turn, affect global commodity prices.
Food prices were one of the main drivers of global inflation in 2022, but they remain relatively stable so far this year, even easing some of the increases caused by higher energy costs in certain areas.
However, this calm is likely to be temporary due to factors such as rising crude oil prices, fertilizer shortages, diesel shortages in some parts of the world, and bad weather conditions, which affect costs that will eventually be reflected in consumer prices, even if delayed.