JPMorgan’s 2027 Food Inflation Warning: How Hormuz, Fertilizer and El Niño Could Collide

JPMorgan’s report, Food Security Is National Security: A Compounding Storm, describes a potential food-inflation shock created by several risks arriving together. Led by senior global economist Nora Szentivanyi, the bank’s scenario sees global food inflation rising from 2.8% in the first half of 2026 to roughly 5% in the first half of 2027 if fertilizer and energy disruptions are amplified by a potentially historic El Niño.

That is a conditional warning, not a forecast that a worldwide food shortage is unavoidable. The central issue is timing: a disruption to fertilizer supply during planting or application windows can affect crop output months before consumers see the full effect in food prices.

The “Five Ws” behind the warning

JPMorgan frames the risk through five interacting pressures: war, weather, warehousing, water and waste. The immediate focus is the combination of shipping disruption around the Strait of Hormuz and the possibility of a powerful El Niño damaging harvests. Together, the shocks could reduce agricultural production capacity while keeping food-price pressure elevated into 2027.

The report’s broader argument is that successive shocks since the COVID-19 period have eroded resilience. A new disruption therefore would not hit an entirely normal supply chain; it could arrive after producers, inventories and logistics networks have already absorbed repeated stress.

How a Hormuz disruption can reach the grocery bill

Nitrogen fertilizer depends heavily on natural gas, making fertilizer markets sensitive to both physical supply interruptions and energy prices. The Middle East is a major source of global urea and ammonia exports—JPMorgan’s related analysis puts the region’s shares at about 42% of global urea exports and 27% of ammonia exports.

When shipping routes or production facilities are disrupted, the chain reaction can look like this:

1. Conflict disrupts shipping and production. Fertilizer and energy cargoes become harder or more expensive to move.
2. Natural-gas, oil and diesel costs rise. Those costs affect fertilizer manufacturing, farm machinery, irrigation, transport and food distribution.
3. Farmers face higher or delayed input supplies. Some may reduce application or postpone purchases, particularly where margins are already tight.
4. Crop yields come under pressure. If fertilizer is unavailable during a critical crop cycle, reopening a shipping route later may not fully restore that season’s output.
5. Food prices respond with a lag. The inflation effect can emerge well after the initial energy or shipping shock.

Market evidence cited by the World Bank shows how quickly fertilizer prices can react: nitrogen urea prices rose above $850 per metric ton in April, an 80% increase from February, after supply disruptions linked to the Strait of Hormuz. A United Nations report also described sharp declines in regional exports over the cited period, including a 95% fall in liquefied natural gas exports, an 83% decline in urea exports and a 75% decline in ammonia exports.

These figures describe reported disruptions and price movements; they do not by themselves prove that global crop yields will fall by a specific amount. The key risk is that a temporary logistics problem becomes a production problem when it overlaps with planting decisions and limited substitution options.

Why repair timelines matter

Fertilizer supply cannot necessarily return to normal as soon as a conflict or blockade eases. JPMorgan estimates that restoring damaged fertilizer production to full capacity could take one to four years, while some natural-gas facilities could require three to five years when well damage is included.

That does not mean shortages must last for those entire periods. It does mean that a short-term interruption can have longer consequences if damaged plants, unavailable feedstock and disrupted trade routes prevent producers from quickly rebuilding supply. The agricultural calendar makes the problem more acute: missed deliveries during a planting or application window may be more damaging than the same delay during a quieter part of the year.

What El Niño adds to the scenario

El Niño is the weather side of JPMorgan’s compounding-shock thesis. A strong event could disrupt weather patterns in major agricultural regions, reducing yields or increasing volatility in crops already facing higher fertilizer, fuel and transport costs. JPMorgan and reports summarizing its analysis warn that the combination could keep food inflation elevated through the first half of 2027.

The available material does not independently provide NOAA’s advisory language, the probability of a “super” El Niño, or the probability that such an event would persist into 2027. Nor does it establish a definitive inflation contribution for El Niño alone. Claims about those precise probabilities should therefore be treated as unverified in this evidence set.

What is supported is the interaction: a weather shock can reduce supply at the same time that an energy and fertilizer shock raises the cost of producing and moving food. That combination is more inflationary than either risk considered in isolation. One supplied report attributes an additional food-CPI effect of about 1.5 percentage points to the combined energy and El Niño scenario, but that estimate should be read as JPMorgan’s reported scenario rather than an independently confirmed outcome.

Which countries could feel the pressure first?

JPMorgan’s warning places emerging markets at particular risk because food generally represents a larger share of household spending there, while agricultural output can be highly sensitive to weather and imported inputs. India, Brazil and Indonesia are cited in the available reporting as vulnerable markets.

Their exposure should not be interpreted as a prediction that each country will experience a food crisis. The risk channels are more specific:

• higher imported fertilizer and fuel costs;
• weather-related losses in important crops;
• pressure on household budgets when food prices rise; and
• possible export restrictions if governments prioritize domestic supply.

The available excerpts support this general vulnerability assessment but do not provide a complete, independently verified country-by-country forecast for India, Brazil or Indonesia.

Is a food crisis within six to 12 months certain?

No. JPMorgan’s language describes a risk that could intensify over roughly the next year and become especially visible in 2027. It does not establish that a global shortage is already inevitable.

Several factors could moderate the initial shock, including existing grain inventories and national or regional food reserves. But inventories can cushion prices only for as long as they remain adequate and trade continues. Prolonged fertilizer shortages, high fuel costs, export controls, weak harvests or an extended conflict could gradually reduce those buffers.

That is why the report emphasizes compounding effects rather than a single trigger. A reopened shipping route may ease one bottleneck, but it may not immediately repair damaged production, replace missed fertilizer applications or reverse a poor harvest.

What the evidence does—and does not—show

The strongest evidence supports four conclusions:

• JPMorgan sees a conditional path from 2.8% food inflation in the first half of 2026 to approximately 5% in the first half of 2027.
• Hormuz-related disruptions have affected fertilizer and energy supply chains, and nitrogen fertilizer prices have responded sharply.
• Fertilizer and natural-gas infrastructure may take substantially longer to restore than shipping routes.
• A severe El Niño would add a weather shock to an already stressed agricultural system, but its exact probability and inflation impact remain uncertain in the supplied material.

The evidence does not verify reports of a specific rally in Chinese agricultural stocks such as Qiule Seed, Shennong Seed or Jinjian Rice. It also does not independently confirm every granular claim about regional fertilizer shares, crop-application calendars or NOAA probabilities.

The practical takeaway is therefore narrower—and more useful—than the headline “global food crisis.” JPMorgan is warning that war, energy, fertilizer, shipping and weather risks could reinforce one another, lifting food inflation and weakening crop output into 2027. The outcome depends on how long the disruptions last, whether alternative supplies arrive in time and whether inventories can absorb the shock before the next planting and harvest cycles.