Conflict, El Niño raise global food price risks

Global food markets are facing simultaneous pressures from geopolitical conflict and extreme weather, with analysts warning that the combination could intensify strains on supplies. The Iran war has already helped push world food prices to their highest level in three years, while a strengthening El Niño threatens to disrupt agricultural output in multiple regions.

Economists describe these developments as overlapping shocks to the same vulnerable system. Conflict-related disruptions are affecting key inputs such as fertilizer, and El Niño-linked weather extremes could weigh on harvests, creating a complex backdrop for food-importing and food-exporting countries alike.

Fertilizer has emerged as one of the clearest casualties of the Iran war. Shipments of urea, a widely used nitrogen fertilizer, rely heavily on the Strait of Hormuz, a vital maritime corridor in the Gulf. Disruptions in and around this route have increased concern about the reliability and cost of fertilizer supplies.

Both recent reporting and analyst commentary note that urea prices this year have broadly mirrored movements in crude oil. This linkage underscores how energy-market volatility can quickly feed through into the cost of agricultural inputs, with higher fertilizer prices potentially limiting usage and affecting crop yields.

Because urea is essential to intensive farming in many regions, prolonged instability in its supply chain could have outsized effects on planting decisions and production levels. The fertilizer squeeze, layered on top of already elevated food prices, is therefore seen as a significant risk factor for global food security.

While the conflict is disrupting input markets, meteorologists and economists are focused on a developing El Niño that could be unusually strong in 2026–27. Such events are associated with shifts in rainfall and temperature patterns that can damage crops through droughts, heatwaves, or flooding.

Analysts warn that an extreme El Niño scenario could deliver a sizeable hit to global agricultural production and trigger substantial price shocks across key commodities. Some staple and tropical crops are viewed as especially exposed to changes in weather patterns, highlighting the risk of tighter supplies in multiple food categories at once.

Reports also note that El Niño-related conditions have already begun to affect some growing regions. Early signs of altered rainfall patterns point to the possibility that weather disruptions could move from forecast risk to realized impact, adding to market uncertainty ahead of future harvests.

With food prices already at a three-year high, the convergence of fertilizer disruption from the Iran war and weather risks from El Niño is creating a challenging environment for policymakers, farmers, and consumers. Higher input costs and potential crop losses increase the likelihood of further price volatility.

The interaction between energy, fertilizer, and food markets is central to this dynamic. As urea prices track crude oil and shipping routes face conflict-related risks, shocks can propagate quickly from fuel markets into farmgate costs and ultimately into consumer prices.

Analysts emphasize that these pressures are global rather than confined to any single country. For import-dependent nations and low-income households, sustained or additional increases in food prices could exacerbate existing vulnerabilities, underlining the importance of monitoring both geopolitical developments and climate-driven weather patterns.