JPMorgan warns of global food crisis in 2027: How El Niño, fertiliser shortages could hit India

The warning is not about the world suddenly running out of food. Instead, it points to a more complicated squeeze: farmers could face higher costs and less reliable supplies of key inputs just as extreme weather threatens production.

That combination could make food more expensive, particularly in emerging economies where households spend a larger share of their income on food. Fertiliser is one of the most important links between the energy market and the food market.

What Happened

Disruptions around the Strait of Hormuz have threatened these supply chains, while higher natural-gas prices have added pressure because natural gas is a key feedstock for synthetic nitrogen fertiliser. The impact is particularly serious because fertiliser cannot simply be delivered whenever it.

• Subhankar PaulUpdated Aug 17, 2026 2:41 PM IST Onion inflation jumped to 22.54% in July from 4.73% in June, while garlic inflation accelerated to 35.36% from 17.93%.The world’s food system could face a fresh.

• JPMorgan has warned that global food inflation could climb to around 5% in the first half of 2027, up sharply from 2.8% in the first half of 2026, as higher agricultural input costs collide.

• JPMorgan says the Middle East accounts for about 42% of global urea exports and 27% of ammonia exports, making the region an important source of nitrogen-based fertilisers.

Key Details

Nitrogen fertiliser such as urea needs to be applied around planting and early crop-growth stages. Missing that window can reduce yields even if supplies return later.

• Historically, El Niño events have been associated with an average 3.5% decline in production in tropical regions, compared with a 2.4% increase in temperate regions.

• JPMorgan economists have put the probability of the current El Niño developing into a very strong or super event by the end of 2026 at 81%, with a 97% probability that El Niño conditions.

• A super El Niño by itself could raise global food inflation by around 0.7 percentage points at its peak, according to JPMorgan.

Why It Matters

JPMorgan estimates that bringing damaged fertiliser production back to full capacity could take one to four years, while repairs to some natural-gas facilities could take three to five years. That creates a potential chain reaction: war → energy disruption → fertiliser shortage.

• When combined with higher energy prices, the impact could rise to roughly 1.3-1.5 percentage points.

• India received 2% above-normal monsoon rainfall in 1997 despite a strong El Niño.

What Reports Say

Coverage of the story so far points to:

• During the 2023-24 El Niño episode, the country imposed export restrictions on some agricultural commodities to protect domestic availability and contain prices.

• JPMorgan's analysis suggests fertilizer-related disruptions could temporarily lift global food inflation to 4-5%, while its later assessment puts the potential annualised food inflation rate at around 5% in the first half of 2027.

• Continued reporting by Business Today as more details emerge