LONDON, Apr 29 (IPS) – As the United States and Israel put a 2026 attack on Iran on hold, most eyes are on oil. Tankers have been rerouted around the Strait of Hormuz, oil standards have climbed and insurance costs have soared. But while the headlines focus on energy, warning signals are already starting to shine from food commodities markets.
Tension continues to rise in the Middle East, but Global wheat and corn supplies remain relatively good And there has been no significant interruption in production. As yet UK wheat futures have risen to almost £183 a tonne – their highest level since mid-November – after rising by more than £2.60 in a single week. Also, fertilizer prices – a key input for future crops – Has doubled since the beginning of the year, However, the main impact on crop production is not yet known.
These are early warning signs – not of crop failure, but of how today’s food system responds to crisis. Food prices have started increasing, FAO food price index continues to rise in February and March 2026Although crops have not yet been damaged, crops have not been destroyed, and global production has remained broadly stable. The crisis is unfolding in real time, even before any material shortages become fully apparent.
Of course, real factors matter – but they work in very different ways. When oil prices rise, they contribute to food production through higher fertilizer costs, more expensive transportation, and increased energy use on farms.
But these are gradual pressures: They work their way through the system over months, as farmers buy inputs, plant crops, and bring the crop to market. The prices associated with these costs will generally increase gradually in line with actual changes in production.
Instead, prices are rising immediately, driven less by the current shortage than by expectations of what might happen. The market anticipates future disruptions and prices will rise faster than the underlying conditions. In this system, financial markets are no longer simply reflecting reality – they are actively reshaping it.
In recent decades, agricultural commodities have transformed from commodities to financial assets. Wheat, corn and rice are now traded not only by farmers and traders, but also by hedge funds, investment banks and institutional investors looking for returns.
Financial instruments such as commodity index funds allow large amounts of capital to flow into these markets, often disconnected from actual supply and demand. Large trading companies are spread across both physical and financial markets, allowing them to exploit volatility rather than profit from it.
When geopolitical shocks occur, this capital moves quickly. Investors position themselves ahead of expected disruptions, driving up futures prices that affect importers, retailers and consumers. So the Iran crisis is not only raising costs, it is activating a financial system prepared to raise them.
The results are global but uneven. In wealthy countries, high food prices affect household budgets. In much of the Global South, where food accounts for the bulk of income, the same increase could push families closer to hunger. Even if local supply conditions remain stable, import-dependent countries will have to pay prices determined on global markets.
These pressures are not purely economic. The political impact of rising food prices can be destabilizing. The rising cost of staple foods has long been linked to social unrest, including in the lead up to the Arab SpringWhen rising bread prices contributed to protests in North Africa and the Middle East. This reflects a broader pattern in which rising food costs – fueled by market speculation – increase the potential for unrest by intensifying existing social and economic grievances.
This helps explain a persistent paradox: hunger is constantly increasing in a world that produces more than enough food. The problem is not just production, but access – and increasingly, how prices are formed.
That system was built over decades: on the one hand, through the deregulation of commodity markets in the global North, which opened the door to large-scale speculative investment, and on the other hand, the deregulation of exports globally through IMF and World Bank programs, which promoted market liberalization, privatization, and the dismantling of public price stabilization mechanisms that left many countries vulnerable to instability.
The emerging food price pressures associated with the Iran conflict should therefore be considered more than a temporary blip. They are a warning sign. If prices can rise before shortages occur, food insecurity is no longer simply a matter of supply. This is a function of how markets are organized.
Unless that system is addressed, each new geopolitical crisis – whether in Iran or elsewhere – will continue to ripple through food markets in a way that will deepen inequality and increase hunger. The next food crisis is not just growing in farms. Its price is already being determined.
mihaela siritanu is a political economist for the Bretton Woods Project
© Inter Press Service (20260429194637) – All rights reserved. Original source: Inter Press Service
