World Bank: conflict lifts food inflation costs

The World Bank said on May 22 that conflict in the Middle East and disruptions in the Strait of Hormuz are pushing up global food costs through higher energy, fertilizer and transport prices. In a data blog tied to its April 2026 Commodity Markets Outlook, the bank said global food prices rose to their highest level since January 2024 in April 2026 after the conflict erupted in late February. The bank linked the move to higher input costs and shipping disruptions rather than an immediate collapse in major food exports. ### How is a Middle East conflict feeding into food inflation? The World Bank said the transmission runs through fuel, farm inputs and freight. Its May 22 note said higher energy prices, fertilizer costs and transport expenses are increasing pressure on global food markets as the Strait of Hormuz disruption hits supply chains. (blogs.worldbank.org) The Strait of Hormuz handled about 35% of global seaborne crude oil trade, 20% of refined petroleum product trade and about 20% of liquefied natural gas trade before the conflict, according to the World Bank. The bank said the Gulf is also a critical source of fertilizers, especially urea, and other industrial inputs. ### What did the World Bank say happened to food prices? (blogs.worldbank.org) Global food prices rose 5% in the two months after the conflict began compared with the prior two months, the World Bank said. Oils and meals climbed 10% over that period, while grain prices rose 3%; year-to-date through April, food prices were 2% above a year earlier. (worldbank.org) April 2026 marked the highest global food-price level since January 2024, according to the bank’s data blog. The bank said oils and meals were the food group most affected, reaching a two-year high in April as higher crude prices increased the appeal of biofuels and as blending mandates rose in Indonesia, Thailand and the United States. (blogs.worldbank.org) ### Why are fertilizer costs part of the story? The World Bank said fertilizer prices are rising because the conflict has tightened supplies and lifted production costs. Its fertilizer price index rose more than 12% quarter-on-quarter in the first quarter of 2026 and by April had reached its highest level since October 2022. (blogs.worldbank.org) Urea prices climbed above $850 per metric ton in April, up 80% since February and the highest since April 2022, the bank said. The World Bank said the Middle East accounts for nearly one-quarter of global urea exports and cited halted ammonia production in Iran and suspended urea, ammonia and sulfur production in Qatar after damage to facilities. (blogs.worldbank.org) ### How large is the broader commodity shock? The World Bank said in its April 28 Commodity Markets Outlook press release that energy prices are projected to surge 24% in 2026, the highest level since Russia’s invasion of Ukraine in 2022. Overall commodity prices are forecast to rise 16% this year, while fertilizer prices are projected to increase 31%. (blogs.worldbank.org) Indermit Gill, the World Bank Group’s chief economist, said the war was hitting the global economy “first through higher energy prices, then higher food prices, and finally, higher inflation.” The bank said Brent oil is forecast to average $86 a barrel in 2026 under a baseline that assumes the most acute disruptions end in May. (worldbank.org) ### Why hasn’t food reacted as sharply as in 2022? The World Bank said the food-price response has been more contained than after Russia’s invasion of Ukraine. Food prices rose 15% in the comparable two-month window in early 2022, versus 5% after the current conflict began. Record grain supply in 2025-26, pre-purchased spring fertilizer in the Northern Hemisphere and the fact that this shock is moving mainly through input costs rather than a sudden loss of major food exports have limited the increase so far, the bank said. (worldbank.org) It added that grain production in 2026-27 is projected to remain the second-highest on record. (blogs.worldbank.org) ### What comes next in the World Bank’s baseline? The World Bank’s baseline assumes the most acute phase of commodity trade disruptions ends in May 2026 and that shipping through the Strait of Hormuz gradually returns toward prewar levels later in the year. The bank said fertilizer prices could ease in 2027 if exports recover and new supply comes online, while risks remain higher if energy prices stay elevated and shipping disruptions persist beyond 2026’s third quarter. (blogs.worldbank.org) (openknowledge.worldbank.org)