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War and heat waves risk making bread and pasta more expensive

2026-08-23 07:57:00Biznes SHKRUAR NGA REDAKSIA VOX
War and heat waves risk making bread and pasta more expensive
War and heat wave risk raising prices of bread and pasta

Global food prices are expected to rise by 11.8% this year and by 4.8% in 2027, with the strongest impact expected on agricultural crops — grains, fruits and vegetables — as well as dairy products, according to Oxford Economics.

This comes at a time when extreme temperatures and drought in Europe have damaged agricultural production, while farmers are simultaneously facing high energy and fertilizer prices, further aggravated by wars in the Middle East and Ukraine.

Following the heatwave in Europe, Coceral, the Brussels-based European association representing the cereals and oilseeds trade, issued a dramatic update in July, lowering its forecast for the combined cereal harvest in the EU-27 and the UK from 295.5 million tonnes to 286.6 million tonnes. By comparison, 310 million tonnes were harvested in 2025.

Grain production in Germany is expected to fall by 7% this year after severe drought and heat waves, AFP reported, citing a warning published on Tuesday by the German Farmers' Association. Production is forecast to reach 41.9 million tonnes.

While the heat wave caused significant damage, farmers are also facing higher costs due to disruptions in the supply of oil and other raw materials, following the blockade of the Strait of Hormuz as a result of the war with Iran.

Oxford Economics estimates that the biggest impact on global food prices comes from "the US-Iran war and its effect on food production inputs, mainly oil (diesel), natural gas and fertilizers," senior economist Tomas Dvorak told Euronews Business.

According to Oxford Economics, global diesel prices rose 36% in July compared to the same month a year earlier, driven in part by disruptions in the Strait of Hormuz, while fertilizer prices are forecast to rise 22% this year.

At the same time, the war in Ukraine is also exerting a significant impact on global food prices.

Cereals account for 25% of the global food price index, and Russia and Ukraine “together account for just under 30% of total world wheat exports and over 10% of corn,” Dvorak said.

Attacks on Russian and Ukrainian ports, loading terminals and ships, as well as disruptions to grain exports through the Black Sea and the Sea of ​​Azov, could affect an annual export capacity of 86 million tons of grain — 52 million tons from Russia and 34 million tons from Ukraine — equivalent to almost 17% of global grain exports, according to the report.

According to the United Nations Food and Agriculture Organization, global prices of basic food products were 1% higher in July compared to a year earlier, while cereal prices had increased by 6.9% and those of vegetable oils by about 17.3%.

Oxford Economics' global food price index tracks commodity prices in international markets, so its increase does not automatically translate into an equal increase in prices in supermarkets.

The growth forecast for 2026 remains lower than the 14.2% growth recorded in 2022.

Which foods could become more expensive?

"The strongest impact will be on agricultural crops — cereals, fruits and vegetables — as well as dairy products," Dvorak told Euronews Business, adding that these categories are most severely affected by droughts and high temperatures.

"This will also be transmitted to the prices of processed products — bread, cheese, wine or oil," he continued. While products such as meat are expected to be less affected.

As a fertilizer-intensive crop, wheat is under the most pressure. According to researchers, its price is expected to increase by 36% year-on-year, to $6.92 per bushel — a unit that for wheat is equivalent to about 27 kilograms — during the third quarter of 2026.

Wheat is used in a wide range of processed foods, from bread and pasta to breakfast cereals and cookies.

"For fresh foods, mainly fruits and vegetables, the impact will be relatively rapid and is likely to become visible in consumer prices within two to three months. For processed foods, the lags are usually longer, given the time needed for harvesting and processing. In this case, we expect the maximum impact on consumer prices to be felt after about six to nine months," Dvorak said.

This means that fresh food prices could start to reflect the shocks from October to November 2026, while the biggest impact on processed food prices could be felt between February and May 2027.

Jed Cartledge, agricultural commodities economist at Oxford Economics, said the hit to food prices could prove stronger than currently anticipated, as the full impact of the Black Sea attacks has yet to be seen and a strong El Niño threatens to damage crops outside Europe as well.

However, he added that higher grain prices could make alternative and more costly export routes economically viable, partially offsetting supply disruptions.


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