EP: 153 No Food No Water in 2027

Global food inflation could climb to around 5% in the first half of 2027, driven by compounding fertilizer shortages, extreme weather, and geopolitical disruptions.

Core Drivers

• Fertilizer Shortages: Middle East conflicts have restricted traffic through the Strait of Hormuz, cutting off a major conduit for the global trade of nitrogen, phosphorus, and sulfur fertilizers. Unlike oil, there are no strategic reserves for fertilizer.
• El Niño and Climate Impacts: A strong El Niño pattern, alongside severe heatwaves and droughts ("climateflation"), is threatening staple crop yields in vulnerable regions like South Asia, southern Africa, and Central America.
• Financial Pressures on Farmers: High fertilizer input costs are forcing farmers to either reduce usage—resulting in thinner harvests—or absorb significant financial losses. [1]

Regional and Market Outlook

• Price Increases: Organizations like JPMorgan and institutions tracking agricultural data warn that pantry staples, fresh produce, and beverages (such as coffee and cocoa-derived sweets) face ongoing price pressures.
• Vulnerable Populations: The United Nations World Food Programme (WFP) warns that acute food insecurity could impact tens of millions of people globally, particularly in import-dependent low-income nations and regions experiencing prolonged dry spells.