By Naveen Thukral and Bernadette Christina
SINGAPORE/JAKARTA, Oct 19 (Reuters) – Muhamad Yasin, a 63-year-old parking attendant in central Jakarta, says he has cut back on meals as rising prices have put food staples beyond his reach.
“I used to be able to get rice, tempeh and tofu for 7,000 to 8,000 rupiah ($0.39 to $0.44). Now it’s 15,000 rupiah,” said Yasin, who earns 200,000 to 300,000 rupiah a week, beside the minimarket where he watches over parked motorcycles.
Global food inflation is poised to accelerate in the coming months and persist well into 2027, as war-related shipping disruptions and El Nino-driven drought squeeze cereal supplies, putting additional pressure on vulnerable consumers like Yasin, a father of four.
In Indonesia, rice prices have already jumped to record highs amid forecasts of delayed rains, while the cost of bread in Egypt has risen by a quarter and sugar prices in India hit an all-time high as the weakest monsoon in over a decade curbed production.
“All this has put considerable pressure on the system,” said Maximo Torero, chief economist at the United Nations’ Food and Agriculture Organization (FAO).
“We will see a bigger impact towards the end of the year, at the beginning of next year and potentially throughout next year.”
The world’s poorest consumers are being hit the hardest as food prices rise sharply in low- and middle-income countries across the Middle East, North Africa and Asia, where food accounts for a larger share of household spending.
According to the World Bank, food prices in the September quarter outpaced headline inflation in 22% of the 150 countries it analysed, up from 14% in the previous quarter.
The FAO Food Price Index, which tracks monthly changes in a basket of internationally traded commodities, averaged 136 points in September, the highest reading since November 2022.
Rising prices heighten the risk of social unrest and could prompt governments that are key suppliers to impose export bans, further exacerbating shortages.
MULTIPLE SUPPLY SHOCKS
Attacks on Black Sea grain infrastructure have disrupted wheat shipments, forcing top importers Egypt and Indonesia to seek alternative supplies, while Red Sea insecurity diverts vessels onto longer, costlier routes around Africa.
The US-Israeli war on Iran has raised fuel prices and disrupted fertiliser exports through the Strait of Hormuz, driving up farming costs even as dry El Nino weather reduces output in India and Southeast Asia.
Wheat prices are up more than 30% in 2026, while rice prices in key Asian exporting countries have risen 10% to 13% in spite of large inventories. Fertiliser prices are off peaks reached earlier in the Iran war, but they remain elevated.
“Rising inflation, particularly food inflation, is a reality,” said Manish Tiwary, chairman and managing director of Nestle India, citing “a challenging environment” that is due in part to higher commodity costs.
In Egypt, prices of unsubsidised bread have risen to around 5 Egyptian pounds ($0.093) for a big loaf from 4 pounds in July, while the price of cooking oil has climbed about 40% in the United Arab Emirates.
Vegetable oil in Indonesia has jumped 7% this year, even though the country is the world’s biggest palm oil producer.
Prices of sugar, onions and pulses in India jumped more than 10% in September from a month earlier due to production shortfalls.
For baker Sayed Abdel Hamid Mohamed in downtown Cairo, it is not just the price of flour.
“If you bring in a skilled worker, it costs you a lot,” he said. “Electricity, water, yeast and the materials we use to produce the loaf of bread for consumers have all risen.”
Tarek Azab, a customer at the bakery, said prices have been continuously rising, “not once, twice, or three times,” in the past few years.
Freight rates have risen about 50% on some key global routes such as the Black Sea to Southeast Asia as oil prices and war premiums surge.
INFLATION CATALYST
While food prices have been rising since late 2025, dwindling local supplies and higher commodity costs feeding through to consumers threaten to accelerate inflation.
Key importers in the Middle East and Africa that held off on buying after strong local harvests now need to return to the world’s markets, potentially triggering a surge in demand.
“In a couple of months, there could be a significant new wave of demand as importers return to the market,” said Alexander Karavaytsev, a senior economist at the International Grains Council in London.
The cushion from record global grain inventories is wearing thin, the FAO’s Torero said.
“Stocks and good harvests in previous seasons have provided a buffer, but those buffers are starting to come under pressure,” he said. “That means commodity price increases could become more pronounced.”
Food processors that typically buy raw materials on three- to six-month contracts are now renewing those deals at higher prices, with weaker local currencies magnifying the costs.
“Shipping costs have also increased and when converted into rupiah, the impact is amplified by the weakening of the Indonesian currency,” said Franciscus Welirang, a director of PT Indofood, the country’s largest food company.
On top of higher prices, food processors are experiencing difficulties in securing supplies, traders said.
Several wheat millers in Indonesia are running their units below capacity as the Russia-Ukraine war has reduced cargo arrivals, said a senior executive at a flour milling company in Jakarta who did not want to be named as they were not authorised to speak to the media.
Indonesian wheat arrivals dropped 41% to 491,000 metric tons in September from a year earlier, Kpler data showed.
For now, soybean and corn inventories are ample, with future supplies hinging on production in the US and South America, although higher oil prices have supported both crops because of their growing use in biofuels.
Favourable southern hemisphere wheat harvests are expected and any downside risk to output in exporters like Australia and Argentina could add a new bullish element to prices, the IGC’s Karavaytsev said.
“There is significant upside risk in prices,” he said.
($1 = 18,000.0000 Indonesian rupiah)
($1 = 53.5000 Egyptian pounds)
(Reporting by Naveen Thukral in Singapore and Bernadette Christina In Jakarta; Additional reporting by Sarah El Safty in Dubai, Yazan Kalach in Cairo, Rajendra Jadhav in Mumbai, Ashley Tang in Kuala Lumpur, and Dewi Kurniawati in Jakarta; Editing by Thomas Derpinghaus)
