World Bank Warns Global Food Prices Expected to Rise in 2027

WASHINGTON: Disruptions to grain shipments, crops threatened by adverse weather conditions, and high fuel and fertiliser costs are expected to drive a significant increase in food prices next year, according to the World Bank on Wednesday.

Food prices are forecast to rise by approximately 10 per cent this year compared with 2025, followed by a further seven per cent increase in 2027, according to the Washington-based institution, as reported by the German news agency dpa.

Energy prices are expected to rise even more sharply this year, with the World Bank forecasting an increase of nearly one-third compared with 2025. However, energy prices are projected to decline in 2027.

The sharp increase is largely attributed to the war launched by the United States (US) against Iran, which has brought commodity shipments through the Strait of Hormuz to a near-complete halt. Several months after the conflict began, shipping activity along the strategic waterway remains below pre-war levels.

Overall, the World Bank expects commodity prices to increase by 23 per cent this year before declining again in 2027.

“This forecast assumes that there will be no major escalation in conflicts affecting global commodity supplies,” the World Bank said.

However, the institution warned: “Energy prices could rise even higher if the conflict in the Middle East intensifies and damage to Russia’s oil infrastructure continues.”

The World Bank also warned that higher-than-expected energy prices or more severe effects of the El Niño weather phenomenon could trigger a food crisis.

Such a crisis could push more people into extreme poverty, as occurred in the early 2010s.

The World Bank defines extreme poverty as living on less than US$3 a day. The institution estimates that approximately 811 million people worldwide currently fall into this category.

BERNAMA