Food prices in the world are rising due to the conflicts in Ukraine and the Middle East. What you need to know

Global food prices have peaked since November 2022 due to ongoing armed conflicts and climatic anomalies. Additional pressure on the market is exerted by the fuel crisis caused by the restriction of ship traffic in the Strait of Hormuz, rising costs of risk insurance and increased delivery time. Who will win and who will lose in this situation and how it will affect Russia — in the Izvestia article.

The reasons for the rising cost of food

• As reported in the summary of the Food and Agriculture Organization of the United Nations, the food price index rose by 1.9% in August compared to July, with grains, dairy products and sugar rising the fastest. If the decline in milk and sugar production is primarily attributed to extreme drought in the producing regions and the influence of the El Nino phenomenon, then the rise in grain prices is primarily due to a decrease in exports from the Black Sea region due to the ongoing Ukrainian conflict.

• The conflict in the Middle East is also making food delivery more difficult. And it's not just that the Black Sea and the Strait of Hormuz have turned out to be a war zone, but also the rising cost of fuel and the forced change in logistics, which implies additional costs for shipping and ship insurance. Difficulties with the purchase of grain in the future may affect the reduction of livestock production, which depends on the supply of grain crops, and logistics problems affect the supply of fertilizers, which may worsen the forecast for the agricultural sector next year.

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In this way, the excess profits of exporters are withdrawn and domestic prices are restrained.

Who will lose

• The situation is most negative for Ukraine, which has reaped a record grain harvest this year. Exports of corn and barley from the country fell fourfold, wheat — by 70%. The decline in exports is hitting global food markets, as Russia and Ukraine account for 27% of global wheat exports. After the Ukrainian attacks on ships and port infrastructure in the Black and Azov Seas, Russia had to redirect food exports through other channels, including ports in the Caspian and Baltic Seas, as well as in the Far East. But Russia's retaliatory strikes led to the fact that grain exports from Ukraine by sea were almost paralyzed, and the sowing campaign was in danger of disruption.

• Ukrainian market analysts assess the situation for grain exports as even more difficult than in March 2022, when world wheat prices soared to a record high ($1,350 per bushel). Now, due to the drought and shallowing of the Danube, the loading of ships had to be reduced and the river route for grain delivery turned out to be overloaded. Road freight traffic has only increased by 11.3%, and a queue of grain wagons has already accumulated on the railway. Additional logistical difficulties are created by restrictions from European countries on the rail transportation of Ukrainian grain, as well as the fact that European ports are overloaded due to transshipment of their own crops from EU countries. The oversupply of grain in the domestic market has led to the fact that Ukrainian farmers are forced to sell wheat at a price one third below cost and are considering whether to start sowing winter crops.

• Among the losers are also the countries of Asia and Africa, which are already suffering due to the ongoing conflict in the Middle East and the logistical problems it has created. The situation is deteriorating due to the rise in energy prices caused by the closure of the Strait of Hormuz and the increase in insurance premiums for shipping in the conflict zone. Wheat imports to Egypt in the first half of 2026 consisted of 82% of supplies from Russia and Ukraine, and Indonesia, Algeria, Bangladesh, Jordan, Thailand, Tunisia and Vietnam are also heavily dependent on Russian and Ukrainian grain. Turkey, although suffering from the clashes in the Black Sea, is in a better position because it is itself a grain processor and exporter, and China not only has large grain reserves, but can also reorient logistics, avoiding the conflict zone.

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• As a traditionally large exporter of agricultural products, the European Union has been severely affected by climate shocks this season: prolonged periods of extremely high temperatures can affect the harvest of corn and sugar beet. Sugar prices are also fueling concerns about crop yields in Brazil, Thailand and the EU due to the expected impact of El Nino before the end of the year. According to forecasts, the sugar shortage may reach about 200 thousand tons, and the price of sugar futures has already exceeded 18 cents per pound and approached the maximum of April 2025, although it was trading below 14 cents on July 30.

Who will win

• The rising price of food on world markets provides an opportunity to increase revenues for exporting countries that are not tied to the Black Sea ports and the Strait of Hormuz. First of all, Brazil is the most developed economy in Latin America. As part of the free trade agreement between the EU and MERCOSUR, Brazil has gained access to European markets since May 2026. Even in the case of a low harvest, logistics is an important advantage for Brazil.

• The USA and Canada also have a winning position. The U.S. Department of Agriculture is already forecasting an increase in exports and domestic consumption of corn amid declining supplies from Ukraine and rising crop prices. Canada is one of the leading wheat exporters and could also benefit from a reduction in market supply. Australia can also take advantage of the situation by sending its agricultural products to Asian markets.

What does it mean for Russia

• Russia, according to the U.S. Department of Agriculture, is the largest exporter of wheat, and rising prices for this crop could potentially increase the country's export earnings. But most of the exports traditionally went through the Black Sea ports, and due to changes in logistics, transportation costs for grain supplies are increasing.

• At the same time, Russia's advantage is the ability to deliver cargo through ports in the Baltic and Caspian Seas. Latvia and Lithuania have already stated that they expect an increase in Russian grain supplies through their ports in the Baltic Sea in October 2026, and have threatened to block this transport corridor. But Russia still has its own ports in the Baltic and the Far East, which will allow it to sell products to foreign customers.