Why the Middle East War Is Raising Food and Consumer Goods Prices

Food prices: energy hits now, fertilizer can hit later

Food is exposed to the conflict before groceries reach supermarket shelves because energy and fertilizer costs feed into farm and distribution costs. The World Bank’s April 2026 outlook forecast overall commodity prices to rise 16% in 2026, driven by soaring energy and fertilizer prices among other commodities; it also projected energy prices to reach their highest level since Russia’s 2022 invasion of Ukraine . FAO said disruptions around the Strait of Hormuz were already raising energy and agricultural input costs worldwide .

Fertilizer is the slower-moving risk. FAO warned that fertilizer shortages and higher energy prices threaten crop yields, which means the price impact can carry into future harvest cycles rather than ending with the current market shock . It also said food-price volatility could be amplified in Africa, Asia and other import-dependent regions .

The latest food-price signal points to pressure rather than universal scarcity. Euronews reported that the FAO food-price benchmark rose for a second consecutive month and was about 1% above its level a year earlier, while supplies were still described as stable .

Consumer goods: longer sea routes raise landed costs

Consumer goods are affected through container shipping and import costs. After the latest Israel-Hamas war began in October 2023, Houthi attacks on vessels in the Red Sea led many shipping companies to avoid the Red Sea and Suez Canal . Detouring around the Cape of Good Hope adds roughly 3,500 nautical miles, or 6,482 kilometers, and increases some voyages by at least 14 days, with Asia-Europe trade especially affected .

The scale of the chokepoint is large. The IMF says the Suez route normally carries about 15% of global maritime trade volume . World Bank analysis says the Suez Canal and Bab el-Mandeb Strait previously carried about 30% of world container traffic; by the end of 2024, vessel traffic through those routes had fallen by about three-fourths, while navigation around the Cape of Good Hope rose by more than 50% .

Those changes matter because they delay deliveries and increase the cost of moving goods. CSIS noted that cargo insurance plays a major role in Red Sea routing decisions and that rates for Red Sea and Bab al-Mandab voyages had risen sharply . J.P. Morgan Research estimated that the Red Sea disruptions could add 0.7 percentage points to global core goods inflation and 0.3 percentage points to overall core inflation, with higher shipping costs likely to pass through to imported-goods prices with a lag .

Why prices can rise even when supplies are stable

Supply availability and supply-chain cost are different. A food market can remain physically supplied while prices still rise because energy, fertilizer, freight and insurance are more expensive. That is why the FAO benchmark can rise even when reported market supplies remain broadly stable .

Retail prices also do not always move the day freight prices rise. J.P. Morgan says the pass-through from higher shipping costs to imported-goods prices depends on the duration and intensity of the disruption, and tends to arrive with a lag .

Who is most exposed

The burden is uneven. Import-dependent regions that must buy fuel, fertilizers and food at global prices have less insulation from the shock. FAO singled out Africa, Asia and other import-dependent regions as especially vulnerable to amplified food-price volatility . UNCTAD has also warned that shipping disruptions are driving up costs, reshaping trade patterns, upending energy and food flows, and heightening food-security risks in vulnerable economies .

Asia-Europe supply chains are particularly exposed because those trade flows rely heavily on the Suez route and have been hit by Red Sea diversions . For consumers, the effect may show up as delayed deliveries, higher import costs and gradual retail price increases rather than the same immediate price jump on every item .

What to watch next

Three signals will show whether the pressure eases or builds: whether energy flows through the Strait of Hormuz remain reliable, whether fertilizer costs and availability stabilize, and whether ships can safely return to Red Sea and Suez routes. FAO flags Hormuz as a critical chokepoint for oil, gas and fertilizers, while Red Sea diversions have already added time and distance to major trade routes .

If energy prices stay elevated, the effect can also spill into global trade. WTO economists warned that a sustained energy-price increase linked to the Middle East conflict could reduce 2026 merchandise trade growth by 0.5 percentage points, from 1.9% to 1.4%, and put pressure on food supplies and services trade .

The bottom line: the war is acting as a global cost amplifier. It raises the price of energy, the cost of growing food and the expense of moving goods around the world. The impact is real, but it is not uniform; the sharpest pressure falls on import-dependent economies, exposed shipping corridors and consumers facing delayed pass-through from higher input and freight costs .