Kathmandu. Multinational financial services firm JP Morgan has warned that global food prices could rise sharply in 2027. According to the firm, fertilizer shortages, geopolitical tensions and a powerful El Niño will exacerbate the crisis.
JPMorgan expects global food prices to rise by 5% in the first six months of 2027. This number was 2.8% compared to the first six of 2026.
The Middle East plays a major role in the global fertilizer supply chain. According to statistics, the Middle East accounts for about 42% of global urea exports and 27% of ammonia exports. In this context, any prolonged tension around the Strait of Hormuz could affect global fertilizer supply and prices.
In addition, natural gas is the primary raw material used to produce nitrogen fertilizer (such as urea). When the price of gas increases, fertilizer production becomes expensive. If farmers use less fertilizer because of this increased cost, it will have a direct impact on crop production.
JPMorgan said it could take 1 to 4 years for affected fertilizer capacity to fully recover and some natural gas plants could take 3 to 5 years to return to normal.
Another major factor in the crisis is the weather, El Niño. JP Morgan estimates that there is an 81% chance that there will be a very strong or super El Niño by the end of 2026. It has a 97% chance of continuing until 2027.
Historically, El Niño has caused an average 3.5% drop in agricultural production in the tropics. According to Morgan, a strong El Niño could add 0.7 percentage points to global food inflation. This, combined with higher energy prices, could reach 1.3% to 1.5% points. –Agency
