Europe faces rising food prices due to drought and conflict

Europe and Hungary are facing a potential surge in food prices driven by a convergence of geopolitical and environmental factors. Oxford Economics predicts global food prices could rise by 11.8 percent in 2026 and an additional 4.8 percent in 2027.

Several factors are contributing to this trend, including heatwaves and droughts affecting crop yields, as well as conflicts in Ukraine and the Middle East causing volatility in energy, fertilizer, and grain markets. The grain harvest estimate for the EU and UK was recently reduced to 286.6 million tonnes, a decrease of over 23 million tonnes compared to last year.

Rising costs for diesel and fertilizers are also expected to impact consumer prices. Drought conditions specifically threaten maize, fruits, and vegetables, while also impacting livestock through reduced milk production and higher feed costs due to irrigation and transport expenses.