Five factors are combining to intensify, JPMorgan: Global food crisis may erupt next year

War, weather, warehousing, water resources, and waste—five simultaneous pressures are tightening the "valve" on the global food supply.

On August 15, a new research report from JPMorgan Chase indicated that the outline of the next global food crisis is taking shape, and food inflation pressures will persist until the first half of 2027.

Led by Nora Szentivanyi, Senior Global Economist in London, the report titled "Food Security is National Security: A Compound Storm" warns that the ongoing disruption of the Strait of Hormuz and a potentially record-breaking super El Niño are simultaneously fermenting, reducing crop yields, shrinking agricultural production capacity, and keeping food inflation at a high level through the first half of 2027.

Szentivanyi points out directly in the report: "Since the COVID-19 pandemic, a series of consecutive shocks have had a cumulative effect, eroding food production capacity and extending food price pressures until 2027. This is not a short-term shock—it reduces the probability of inflation falling back soon and means the food inflation cycle is likely to persist through the first half of 2027."

She expects the global food inflation rate to accelerate from 2.8% in the first half of 2026 to 5% in the first half of 2027.

The "Five Ws": Five Root Causes of the Crisis

JPMorgan Chase attributes this risk to the "Five Ws": War, Weather, Warehousing, Water, and Waste.

These five factors do not exist in isolation; instead, they overlap and reinforce each other. War disrupts critical shipping lanes, abnormal weather shocks agricultural output, insufficient warehousing capacity reduces buffer space, water shortages limit irrigation, and food waste further cuts into effective supply.

Szentivanyi singles out the most immediate vulnerability—fertilizer. She says, "The disruption of the Strait of Hormuz and the approaching super El Niño are intensifying fertilizer and food price pressures."

Fertilizer is a core input in food production; its price increases are directly transmitted to crop costs, leading to higher retail food prices. The Strait of Hormuz is a key global transport corridor for energy and fertilizer raw materials. Any blockage can amplify the impact along the supply chain.

Super El Niño: A "Time Bomb" with a 6-12 Month Lag

El Niño’s destructive power has a distinct characteristic—lag. Szentivanyi notes, "The impact on crops and prices is still accumulating, with agricultural shocks usually lagging oceanic peaks by 6 to 12 months."

This means that even if El Niño’s climate peak has passed, its substantial impact on food output is just beginning to emerge.

What’s more concerning is that this year's energy shock is amplifying El Niño’s inflationary effect. Szentivanyi estimates that the combination will push global food CPI up by about 1.5 percentage points, while historically the average impact of El Niño alone is only 0.7 percentage points—effectively doubling the shock.

Specifically, food inflation is expected to reach an annualized rate of 5% in the first half of 2027, contributing an additional 0.6 percentage points to overall inflation and slowing the full-year disinflation process by 0.3 percentage points.

Emerging Markets Are the Most Exposed

This shock is not evenly distributed geographically; emerging markets will bear the most pressure.

Szentivanyi notes: "The risks are concentrated in South Asia and Southeast Asia (covering rice, sugar, and coffee), West Africa (cocoa), and parts of East and South Africa. Emerging markets bear the brunt of El Niño’s impact. The economies with the strongest food inflation responses are found in emerging market Asia and Latin America—regions where agriculture is more sensitive to weather and food occupies a higher weight in the consumption basket. India, Colombia, Indonesia, Brazil, and South Korea are among the most vulnerable economies."

In comparison, while Western countries have strategic oil reserves, they have almost no buffer when it comes to fertilizer stocks. The report also points out that major Asian countries are stockpiling food, fertilizer, energy, and industrial metals on a large scale, while the West is clearly passive on this front.

Szentivanyi’s judgment: the epicenter of the next inflation shock may no longer be gas stations, but supermarket shelves.

Multiple Institutions Issue Simultaneous Warnings

JPMorgan Chase is not alone. Research departments at institutions like Goldman Sachs and HSBC have previously sounded alarms about food inflation risks.

The United Nations Food and Agriculture Organization (FAO)’s Global Food Price Index rose to a three-year high this July, confirming these warnings with data.

Robert Ohmes, an analyst at Bank of America, has recently issued a similar warning. He stated that grocery inflation is "probably on the way," citing an index combining wage, diesel, and commodity costs and predicting that a new round of food price surges could appear on supermarket shelves as early as this autumn.

Nevertheless, global hunger has improved statistically—around 645 million people are expected to face hunger in 2025, a decrease of about 43 million compared to 2022. Yet, at the same time, 2.1 billion people (25.8% of the world’s population) remain in moderately or severely food-insecure conditions. This vast base means that any price shock will quickly translate into humanitarian pressure.