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

The world’s food system could face a fresh supply shock in 2027 as geopolitical tensions, fertilizer shortages and an intensifying climate threat converge. 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 with potentially weaker crop yields.

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.

Why fertilisers are at the centre of the problem 

Fertiliser is one of the most important links between the energy market and the food market.

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. 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 becomes available. 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.

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 → higher farm costs → lower fertiliser application → weaker yields → higher food prices.

Why El Niño could make the situation worse 

The second major risk is climate. JPMorgan says a developing El Niño could alter rainfall and temperature patterns across major agricultural regions, increasing the risk of droughts, floods and other weather extremes.

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.

The bank has also warned that forecasts point to the possibility of a particularly strong, or “super”, El Niño. 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 could persist into 2027.

A super El Niño by itself could raise global food inflation by around 0.7 percentage points at its peak, according to JPMorgan. When combined with higher energy prices, the impact could rise to roughly 1.3-1.5 percentage points.

What does El Niño mean for India's monsoon? 

For India, this is particularly important because the southwest monsoon is central to agriculture and water availability.

The relationship is not automatic, but El Niño generally weakens the Indian summer monsoon. Several El Niño years recorded below-normal rainfall, although other factors — including the Indian Ocean Dipole and regional atmospheric circulation — can alter the outcome.

There have also been exceptions. India received 2% above-normal monsoon rainfall in 1997 despite a strong El Niño. So, an El Niño should be viewed as a risk factor rather than a guarantee of drought.

For Indian agriculture, however, even an uneven monsoon can be damaging. A prolonged dry spell during crop growth can reduce yields, while intense rainfall concentrated into a few episodes can cause flooding, soil erosion and crop damage without necessarily improving overall farm water availability.

Which Indian crops could feel the pressure? 

The risk extends across India's major food crops.

A weaker or erratic monsoon can affect rice, pulses, oilseeds, cotton, sugarcane and other rain-dependent crops. The consequences can extend beyond farms: lower output can tighten domestic supplies, increase wholesale prices and eventually push up retail food inflation.

Fertiliser availability adds another layer. India is heavily dependent on imports for several fertiliser inputs, meaning international prices and shipping disruptions can quickly influence domestic production costs.

JPMorgan specifically identifies India, Brazil and Indonesia among the countries where the combination of fertiliser disruption and El Niño could be particularly significant.

India has already experienced the policy challenge that can emerge when global crop supplies tighten. During the 2023-24 El Niño episode, the country imposed export restrictions on some agricultural commodities to protect domestic availability and contain prices.

JPMorgan says the effects can also appear with a delay. The peak impact of an El Niño-related commodity shock typically occurs several months after the initial weather disruption, while fertiliser shortages can persist across multiple planting cycles.

What happens to food prices? 

The immediate consequence is likely to be higher production costs. Farmers facing expensive fertiliser, fuel and other inputs have three broad choices: absorb the higher costs, reduce fertiliser use or switch crops.

The latter two options can reduce overall supply.

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.

That could also affect headline inflation. JPMorgan estimates that food inflation at 5% in the first half of 2027 could add around 0.6 percentage points to global headline inflation.

Why India & other emerging markets are vulnerable 

The shock will not be evenly distributed. Food represents a much larger share of household spending in many emerging economies than in advanced economies. That means even a moderate increase in food prices can have a much bigger impact on household budgets.

Countries such as India, Indonesia and Brazil are particularly exposed because of their combination of agricultural dependence, fertiliser requirements and vulnerability to El Niño-related weather shifts.

For India, therefore, the concern is not simply whether the country will have enough food. The bigger question is whether farmers can maintain production at affordable costs while global fertiliser and energy markets remain volatile.

JPMorgan also points to some buffers, including adequate global grain inventories and relatively healthy rice stocks in Asia. The ultimate impact will depend on the strength and duration of El Niño, the recovery of fertiliser production, the evolution of the Iran conflict and the ability of farmers and governments to adapt.