Oxford Economics projects global food prices to rise 11.8% in 2026
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Oxford Economics projects global food prices to rise 11.8% in 2026 and 4.8% in 2027, with cereals, fruit, vegetables and dairy hit hardest. The forecast follows heatwaves and drought in Europe that cut harvests, and higher energy and fertiliser costs driven by wars in the Middle East and Ukraine.
Key Facts
- Coceral cut its EU-27 and UK grain harvest forecast to 286.6 million tonnes in July, down from 295.5 million tonnes and below the 310 million tonnes harvested in 2025.
- Germany's grain harvest is projected to fall 7% in 2026 to 41.9 million tonnes after drought and heatwaves, the German Farmers' Association said.
- Oxford Economics says global diesel prices rose 36% year on year in July and fertiliser prices are forecast to rise 22% in 2026.
- Attacks on Russian and Ukrainian ports and Black Sea grain routes could affect 86 million tonnes of annual grain-export capacity — 52 million tonnes from Russia and 34 million tonnes from Ukraine, equivalent to almost 17% of global cereal exports.
- UN FAO reports global food commodity prices were 1% higher in July than a year earlier, with cereal prices up 6.9% and vegetable-oil prices up about 17.3%.
European Harvest Damage
Coceral, the Brussels-based European cereals and oilseeds trade association, issued an extraordinary update in July cutting its forecast for the combined EU-27 and UK grain harvest from 295.5 million tonnes to 286.6 million tonnes. That compares with 310 million tonnes harvested in 2025. The German Farmers' Association, cited by AFP, forecasts Germany's grain harvest to fall by 7% this year to 41.9 million tonnes after severe drought and heatwaves. Europe's extreme heat and drought have damaged crops, while farmers also face high energy and fertiliser prices.
War-Driven Input Costs
Oxford Economics identifies the US-Iran war and its impact on inputs for food production — mainly diesel, natural gas and fertiliser — as the most significant driver of global food price increases, Senior Economist Tomas Dvorak said. Global diesel prices surged 36% year on year in July, driven partly by disruption to the Strait of Hormuz. Fertiliser prices are forecast to rise by 22% this year. The war in Ukraine is also having a significant impact on global food prices. Cereals make up 25% of the global food price index, and Russia and Ukraine together account for just under 30% of total global wheat exports and above 10% of corn, Dvorak said.
Grain Export Disruption
Attacks on Russian and Ukrainian ports, loading terminals and ships, as well as disruption to Black Sea and Sea of Azov grain exports, could affect 86 million tonnes of annual grain-export capacity. Of that total, 52 million tonnes is from Russia and 34 million tonnes from Ukraine. The affected volume is equivalent to almost 17% of global cereal exports. The UN Food and Agriculture Organisation reports global food commodity prices were 1% higher in July than a year earlier. Cereal prices rose 6.9% year on year and vegetable-oil prices rose approximately 17.3%.
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Oxford Economics projects global food prices to rise 11.8% in 2026
