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Global food commodity markets entered 2026 on relatively stable ground, but the World Bank has warned that escalating geopolitical tensions and worsening weather conditions could push prices higher than currently projected.
In its latest blog titled “When risks stack up: Threats to global food markets in 2026,” the Bank said ample supplies of grains and edible oils had helped stabilise markets, with its Commodity Markets Outlook forecasting a modest 2.5 percent increase in global food prices this year.
However, it cautioned that this outlook remained vulnerable to multiple emerging risks that could quickly reverse recent stability.
One of the key threats identified is the expected strengthening of El Niño weather conditions in the coming months.
“A prolonged or intense El Niño could trigger drought across major agricultural regions, including southern Africa, Southeast Asia, Australia, northern Brazil and South Asia, all of which are important producers of grains, sugar and oilseeds,” the Bank noted.
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Such disruptions, it warned, could simultaneously affect several key crop-producing regions, tightening global supplies and pushing prices above current forecasts.
The Bank also highlighted rising energy and fertiliser costs as another major risk factor.
Disruptions in natural gas and fertiliser supply chains have already increased production costs for farmers globally, with fertiliser prices remaining sensitive to geopolitical developments.
While the baseline outlook assumes that supply pressures will ease later in the year, the Bank warned that prolonged disruptions could lead farmers to reduce fertiliser use, resulting in lower yields and further upward pressure on food prices.
In addition, the institution pointed to growing demand for biofuels as a factor adding strain to food markets.
Higher crude oil prices have made biofuel production more attractive, increasing demand for crops such as maize, sugar and edible oils that are also used for human consumption.
Several governments have also expanded biofuel blending mandates, further increasing demand pressure on agricultural commodities.
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