According to the UN Food and Agriculture Organization (FAO), if the crisis persists, global fertilizer prices will rise by an average of 15-20% in the first half of 2026.
Maximo Torero, FAO chief economist, quoted by Euronews Business, noted that rising fertilizer and energy prices increase farmers’ production costs, and fertilizer shortages could lead to lower yields at the end of the year, reducing global grain supplies.
The FAO identifies three main channels through which the crisis could lead to higher food inflation in Europe. The first is energy prices.
The Persian Gulf is a critical supplier of refined fuels, and supply disruptions have driven up the price of diesel and jet fuel, increasing logistics costs throughout the food supply chain.
Higher natural gas prices are also directly affecting European fertilizer production. Their prices exacerbate the problem. Europe is not directly dependent on large volume fertilizer imports from the Gulf, but the markets are global.
Demandfor biofuels will increase demand for feedstock
The third channel is demand for biofuels. Rising oil prices are encouraging governments and producers to turn to biofuels as an alternative. This increases the demand for feedstock.
This feedback can divert crops away from food production, reduce global grain supplies and lead to higher food prices in Europe and beyond.
Since Russia’s invasion of Ukraine in early 2022, annual inflation for food and non-alcoholic beverages in the EU has reached unprecedented levels, exceeding 19%. In 2025, it was 3.3%. And it ranged from 0.3% in Cyprus to 7% in Estonia.
The exception is Turkey, where food inflation has increased by more than 30% annually.
