Why Global Food Prices Keep Rising Despite High Output

Global food prices climbed to their highest level in almost four years in September, even though the world is heading toward its second-largest grain harvest on record. The paradox — abundant supply, rising prices — has a clear explanation: the pressure is coming not from the fields but from the routes that carry food to market, and from the energy and fertilizer costs embedded in producing it.

The benchmark FAO Food Price Index averaged 136.0 points in September 2026, up 1.5 percent from August and 5.8 percent from a year earlier. That is the highest reading since November 2022, according to the UN agency, which released the figures on October 2.

Output Is Not the Problem

The most striking feature of this price surge is what is not driving it. FAO’s latest Cereal Supply and Demand Brief, published alongside the index, forecasts 2026 global cereal production at 2,979 million tonnes — a 2.1 percent dip from last year’s all-time high, but still the second-biggest harvest ever recorded. World cereal stocks are forecast to hold steady at 950 million tonnes, leaving the stocks-to-use ratio at 31.7 percent. World cereal trade, however, is expected to decline 3.5 percent to 505.8 million tonnes — a sign that the strain is showing up in movement, not in supply.

In other words, there is no global shortage of grain. The problem is getting it where it needs to go — and affording the inputs to grow the next crop.

Transport, Not Scarcity, Drives the Spike

The clearest driver is logistics. FAO attributes the rise mostly to “transportation disruptions and weather concerns that constrained availability.” The FAO Cereal Price Index jumped 5.1 percent from August and stands 17.2 percent above a year ago. Wheat prices rose 6.3 percent, maize 5.6 percent.

Two chokepoints are doing the damage: the Black Sea and the Strait of Hormuz. The Black Sea normally accounts for roughly a quarter to a third of global wheat export trade, more than 10 percent of maize, and two-thirds of sunflower oil. With shipping disrupted, Russia and Ukraine’s combined wheat shipments in July–September were 6.5 million tonnes below the same period a year earlier — a gap that could widen to 10.2 million tonnes by end-October, Miller Magazine reported from an IFPRI–AMIS seminar.

Other exporters have only partly filled the hole. Canada, the EU, and Argentina added shipments, but those gains were swamped by declines from the United States, Australia, and above all Russia and Ukraine. The cost of moving grain has followed: the IGC Grains and Oilseeds Freight Index recently hit a four-year high, up 16 percent year on year.

“We are seeing a persistent and increasingly broad based build up in global commodity prices, as disruptions in the Strait of Hormuz and the Black Sea combine with climate shocks, putting pressure on energy, transport and key food commodities,” FAO Chief Economist Maximo Torero said. “If sustained, these pressures will soon pass through to consumer food prices, especially in food and energy import dependent countries.”

The Fertilizer Time Bomb

Beneath the shipping story lies a slower-burning cost problem. Modern agriculture runs on cheap nitrogen fertilizer, which in turn depends on natural gas. The conflict has disrupted both: by one analysis, the war cut off roughly 17 percent of global natural gas supply and more than 30 percent of nitrogen fertilizer supply, with nearly half of globally exported sulfur stranded in the Middle East and Gulf region. US data showed fertilizer prices up more than 20 percent year on year in June 2026, with nitrogen fertilizer up 46 percent, as reported by Global Times.

Goldman Sachs estimates fertilizer accounts for about 20 percent of food production costs. That matters because higher input costs do not simply raise prices — they change behavior. Some Australian farmers are considering shrinking next season’s wheat area because prices no longer cover rising fertilizer bills. That kind of supply response, repeated across regions, could tighten markets further down the line.

A Different Kind of Food Crisis

The current situation differs from the crises of 2020 and 2022 in an important way. As the International Food Policy Research Institute has noted, Middle Eastern countries are not major food exporters, so there is no direct shortfall of the kind that triggered past emergencies. The risk this time flows from rising production, transport, and financing costs — a more diffuse and harder-to-fix problem.

The strain falls hardest on low-income food importers. Because commodity prices are denominated in dollars, and geopolitical instability tends to strengthen the dollar, these countries face what analysts call a “double dollar blow”: imported food costs more in local currency precisely when their finances are most stretched.

Climate adds another layer of uncertainty. A strengthening El Niño is expected to weigh on rice yields in South and Southeast Asia, where output typically runs 1.0–1.5 percent below trend during such events. The September FAO release notes that AMIS’s monthly Market Monitor flagged elevated freight rates, firmer fertilizer markets, and continued logistical disruptions as combining to create “a more uncertain market environment.”

The outlook is also pressuring future supply. SovEcon cut its forecast for Russia’s 2026/27 grain exports to 44.7 million tonnes from 49.4 million and warned that Azov and Black Sea ports may stay shut until 2027, according to Maritime Professional. Ukrainian farmers, meanwhile, face production costs of roughly $165–180 per tonne against losses of $30–40 per tonne, raising the prospect of a 20–40 percent drop in next season’s wheat crop.

What to Watch

The story now hinges on three variables: whether Black Sea shipping recovers, how quickly importers draw down stocks, and whether this autumn’s planting decisions shrink next season’s harvest. FAO’s David Laborde has warned that risks are compounding with higher energy, fertilizer, transport, and financing costs — a combination that erodes both household and government capacity to absorb rising food bills.

For the world’s poorest consumers, the distinction between scarcity and affordability may matter little. As the analysis behind this story puts it, food security is not only about whether there is food to eat, but whether people can afford to eat it — and eat well. On current trends, that question is getting harder to answer.