Food prices to rise in 2026, driven by energy, geopolitics and climate

 Food prices are once again subject to an increase driven by a combination of factors that go far beyond supply and demand. Climate disruptions, energy costs, and geopolitical tensions are regaining prominence in the formation of agricultural and food prices, within an international context marked by uncertainty.

In recent years, consumers have seen how any alteration in production conditions or supply chains can end up having a direct impact on the shopping basket. A drought, a heatwave, rising fuel costs, or an international conflict can cause cost increases that are progressively passed on throughout the entire food chain.

The OECD-FAO Agricultural Outlook 2026-2035 report, published in July 2026, points out that agricultural markets are exposed to increasingly volatile supply and that small disruption episodes can provoke significant price responses. It also highlights as short-term risks the 2026 Middle East conflict, the disruption of energy and fertilizer trade through the Strait of Hormuz, and the increase in uncertainty and input costs.

Similarly, a World Bank article from June 2026 summarizes the risks for 2026 food markets with a similar combination: the "El Niño" weather phenomenon, energy and fertilizer costs, growing demand for biofuels, and potential trade restrictions.

In this article, we analyze the factors in detail.

Energy reaches the entire food chain

A major cause is the continuous rise in energy prices. Producing food is not just about sowing, cultivating, and harvesting. Agricultural machinery needs fuel, fertilizers require energy to be manufactured, food must be transported, and many products need refrigeration or industrial processing.

For this reason, an increase in the price of oil, gas, or electricity can end up affecting the final price of food, even if the impact is not immediate. The food chain works as a succession of links. If costs increase in one phase, a part of that increase may end up being passed on to the next. The result is that higher energy costs can eventually reach the consumer in the form of higher prices.

Climate disruption, another factor

Agriculture is particularly vulnerable to weather variations. Prolonged droughts, extreme temperatures, torrential rains, or out-of-season frosts can reduce harvests and affect product quality. This vulnerability is especially significant in crops such as cereals, olive oil, fruit, or coffee, among many others. When a harvest is lower than expected, available supply decreases and prices can react rapidly.

Furthermore, rising temperatures are modifying agricultural calendars and production zones. Farmers must adapt to more unpredictable conditions, with greater needs for water, irrigation, crop protection, and investments to mitigate the effects of extreme weather events. All of this also carries an economic cost.

War and politics also affect prices

Politics adds to this situation. Wars, trade sanctions, export restrictions, and tensions between major powers can disrupt international trade in raw materials. Cereals are a particularly clear example. When problems arise in major exporting regions, international markets may react to the possibility of a shrinking supply. The same can happen with fertilizers or other products necessary for agricultural activity.

In addition, current supply chains are global. Food consumed in Europe may depend on raw materials, energy, components, transport, or packaging coming from different countries. This interdependence provides efficiency, but it also means that problems in one region can have repercussions far from their origin.

Pressure that does not disappear when inflation falls

One of the most complex aspects is that a moderation in general inflation does not necessarily mean that food prices will return to previous levels. When production costs increase, companies can absorb part of the increase, reduce margins, or pass it on to the consumer. And even if some costs moderate afterwards, this does not imply that final prices automatically return to their initial level.

This is why it is important to differentiate between inflation and the price level. If food prices stop growing at the same pace, food inflation may have decreased, but the consumer continues to pay more than before.

The challenge for the food sector

Faced with this scenario, the sector will have to cope with a reality where uncertainty may become a structural feature. Diversifying suppliers, improving energy efficiency, adapting crops to climate change, and more efficient water management can help reduce risks.

It will also be important to reinforce local and regional production capacity whenever viable, without giving up international trade. The goal is not to isolate markets, but to reduce vulnerability to potential disruptions.

For consumers, all of this translates into an increasingly evident reality: the price of a food item depends not only on what it costs to produce. It also reflects weather conditions, energy costs, the situation of international markets, and political decisions affecting global trade.

Ultimately, food prices have become an indicator of the tensions running through the global economy. And as long as the climate remains unpredictable, energy continues to be a strategic factor, and geopolitics opens up new sources of uncertainty, the shopping basket will remain sensitive to what happens far beyond the supermarket.