JPMorgan Chase & Co. (NYSE:JPM) warned that global food inflation could accelerate sharply into 2027 as fertilizer supply disruptions, geopolitical tensions and weather risks threaten agricultural markets.

The ‘Five Ws’ Driving Food Inflation Risk

According to a report by BigGo Finance, JPMorgan, led by senior global economist Nora Szentivanyi, attributed the potential crisis to five factors: war, weather, warehousing, water, and waste.

The report said potential shipping disruptions in the Strait of Hormuz, combined with a possible historic El Nino event, could weaken global crop yields and constrain agricultural production.

The bank projected that global food inflation would accelerate from 2.8% in the first half of 2026 to 5% in the first half of 2027.

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Geopolitical Tensions Threaten a Key Fertilizer Chokepoint

JPMorgan said tensions around the Strait of Hormuz pose a direct risk to global fertilizer supply, since the Middle East accounts for a large share of the world’s potash and urea exports, with Qatar and Iran alone making up roughly 9.3% and 8.4% of global urea exports in 2025.

JPMorgan did not immediately respond to Benzinga’s request for comment on the report’s findings and reserve outlook.

The National Oceanic and Atmospheric Administration currently puts the probability of a historic El Niño event during October through December 2026 at 69%, with major grain-producing regions in South Asia, Southeast Asia and Europe facing yield-reduction risks.

USDA Data Shows Mixed Signals

The U.S. Department of Agriculture’s August World Agricultural Supply and Demand Estimates report showed global wheat ending stocks for 2026/27 at 273.25 million tons, up slightly from July, while U.S. wheat ending stocks fell 22% from a year earlier to 717 million bushels on lower production.

China Moves To Support Farmers

According to BigGo, Chinese provinces have begun activating price-floor procurement programs for grain in recent weeks, with Jiangxi and Hunan activating 2026 minimum purchase price plans for early indica rice.

As the world’s top producer of both wheat and rice, China’s grain policies carry outsized weight in global markets.

In May, President Donald Trump brokered a trade agreement with China, committing the country to purchase at least $17 billion in U.S. agricultural products annually through 2028.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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