South Africa is still experiencing mild food price inflation, with the latest food inflation print easing to 3.4% in March 2026 (from 3.7% in February). However, the fears of generally higher food prices continue to linger internationally.
The underpinning factor behind the likely surge in prices globally is the disruption to agricultural activity due to the Middle East war’s impact on fuel and fertiliser supplies and prices. There also remain concerns about the likely negative impact of El Niño on global agricultural production in the 2026-27 season.
These matters, however, remain part of possible negative outcomes in the months ahead. At the moment, general agricultural supplies are solid globally and domestically. Consequently, global agricultural prices have nudged up a bit, though not as dramatically as some may have anticipated. For example, on 8 May 2026, the Food and Agriculture Organization of the United Nations (FAO) published its global Food Price Index showing that it had nudged up mildly in April 2026. This index mainly measures the monthly change in international prices of a basket of agricultural commodities, not actual retail prices per se.
The FAO Food Price Index averaged 130.7 points in April 2026, up 2% from its revised March level. This marked the third consecutive monthly increase. The underlying factors were mainly vegetable oils, meat and cereals prices. Other products have generally eased.
From an annual perspective, the index is 2% higher than a year ago, reflecting fears about the uncertain path ahead. Still, we are nowhere closer to the levels we saw in March 2022, after the start of the Russia-Ukraine war. The index is still 18% down from the highs of March 2022.
Global grain prices are likely to remain at lower levels than during the Russia-Ukraine war shock for some time. Some may wonder why the current shock is different from the 2022 Russia-Ukraine war, which led to a surge in grain and fertiliser prices.
Two things are different from the 2022 Black Sea war.
First, there are currently ample global grain supplies, which are adding significant downward pressure on prices. For example, in its March 2026 report, the International Grains Council (IGC) placed the 2025-26 global grains and oilseed production at 2.5 billion tonnes, up 9% from a year ago. These include maize, wheat, soybean and rice, among major grains and oilseeds. If we zoom in on wheat, the 2025-26 global harvest was a record 845 million tonnes, underpinned by ample harvests across major producing regions such as the EU, Russia, the US, Canada, Australia, Ukraine, China and India.
The 2025-26 global maize harvest is estimated at 1.3 billion tonnes, up 6% from the previous season. The large harvests in the US, Brazil, Argentina, Ukraine, China, India and South Africa boosted this number. We saw similar harvest conditions in rice, with the IGC placing the 2025-26 global rice harvest at a record 544 million tonnes. This large harvest was supported mainly by India, China, Bangladesh and Vietnam, among others.
In soybeans, the harvest for the 2025-26 season is well above average, at 426 million tonnes, on the back of large harvests in the US, Brazil, Argentina, China and Paraguay, among others. The 2025-26 sunflower seed production was also robust, at 56 million tonnes, up 8% from the previous season, driven by large harvests in Russia, Ukraine, the EU, Argentina, Kazakhstan and South Africa.
These are not the only agricultural value chains that saw a robust harvest. We also saw ample harvests of various fruits and nuts across major producing countries worldwide
Second, the Middle East is not a major grain-producing region but an importer; therefore, a war at a time when we have ample grain supplies is unlikely to lead to an immediate increase in grain prices. But the impact of the war on the fertiliser market is likely to weigh on the 2026-27 agricultural season. The impact of this challenge will be more apparent in 2027, going into 2028.
We are not as concerned about the supplies currently; we are worried about the path ahead, depending, of course, on the outcomes of the 2026-27 season. We will only start to worry about the impact of all of this on global grain prices if the war continues for longer and starts to affect fertiliser use in the upcoming season.
I must say though, that higher fertiliser and fuel prices, which remain a key risk, are driving global food price concerns. However, the higher fertiliser prices will matter more in 2027, on the back of the 2026-27 season. Farmers in the northern hemisphere recently started planting the new season’s crop, and in the southern hemisphere we will only start in October 2026.
If higher fertiliser prices lead to a reduction in planted area, we will start to worry more about grain prices in late 2027 and into 2028, and much about such possible eventuality will become clear from mid-year onwards. DM