Global commodity prices are rising sharply in 2026, with significant impacts on food inflation across many low- and middle-income countries, particularly in the Global South. According to recent projections from the World Bank, overall commodity prices are expected to increase by 23 percent this year, with energy prices climbing 32 percent. Brent crude oil prices are forecast to average $91 a barrel, up from $69 in 2025. While these figures are closely watched by policymakers and financial markets, their effects are being felt acutely by consumers at local markets from North Africa to South Asia.

Despite headline inflation rates appearing relatively moderate, the prices of fresh produce and other perishable foods are rising at a much faster pace. For example, in Egypt, overall inflation reached 12.8 percent in September, but vegetable prices increased by nearly 31 percent year-on-year. In Pakistan, overall inflation stood at 10.3 percent, surpassing the central bank’s target, with perishable food prices soaring almost 25 percent in August; onion prices alone were reported to have more than doubled compared to the previous year. Even in Oman, known for its stable economy and regulated fuel prices, vegetable prices grew by 20.1 percent and fruit prices by 16.3 percent in September, while headline inflation remained low at 3.2 percent.

This disparity arises because staple goods such as subsidized bread and regulated utilities tend to mute headline inflation figures, whereas fresh food costs are more vulnerable to global price shocks. The fresh food sector is highly energy-intensive and time-sensitive, relying on diesel for harvesting and transport, refrigeration throughout the supply chain, rapid shipping, and insurance. Increases in fuel costs, freight charges, and war-risk premiums multiply along the chain, ultimately inflating retail prices. Unlike non-perishables, fresh produce cannot be stockpiled without spoilage, amplifying its price volatility.

The World Bank’s data reveals that food inflation exceeded 5 percent in half of low-income countries during the first quarter of 2026, even as inflation slowed in higher-income nations. The ongoing conflict in the Middle East has exacerbated the situation; the Bank warned earlier this year that the war might push up to 45 million more people in developing countries into acute food insecurity. In addition, there are concerns about the persistence of El Niño conditions into 2027, which could threaten harvests in vulnerable regions.

While consumers bear the brunt of rising costs, some industries are profiting. Major energy firms such as Shell, BP, TotalEnergies, and ExxonMobil have reported record refining margins amid higher fuel prices, underscoring an uneven distribution of gains along the supply chain. Experts note that those controlling refining, trading, and logistics capacities are better able to absorb and pass on costs, whereas consumers, especially in low-income households, face the full impact without similar buffers.

Governments across the Global South face constrained fiscal space, with many countries being net importers of fuel and food and struggling with depreciating currencies and high debt servicing costs. Central banks are cautious about cutting interest rates, maintaining expensive credit conditions that affect small traders, transporters, and farmers integral to food distribution.

Some Gulf countries have introduced measures to mitigate the impact on households. For instance, Oman expanded its zero-rated VAT list effective October 1 to include over 800 food items, aiming to reduce living costs. Saudi Arabia announced an increase in monthly allowances for eligible public sector employees and retirees ahead of utility tariff hikes scheduled for 2027. However, such fiscal interventions are more feasible in energy-rich economies with budget surpluses, a luxury not available to most Global South countries experiencing similar price shocks.

Experts recommend that relief efforts should be targeted towards vulnerable populations through cash transfers or direct food assistance, preserving fiscal stability while protecting those most affected. They also urge governments to monitor price margins along food supply chains to detect whether retail price increases stem from genuine cost rises or from widened intermediary profits. Additionally, investing in regional sourcing, cold storage infrastructure, and protected agriculture could reduce reliance on distant, vulnerable supply chains.

International support is also seen as crucial, given that many affected countries have not contributed to global shocks driving these price rises. Providing timely and concessional financing to manage war-related food and energy disruptions could help prevent further social and economic instability. Ultimately, the resilience of the global economy depends on whether families in cities from Cairo to Karachi and Muscat can afford to maintain access to essential, nutritious foods despite these ongoing challenges.