Wheat prices have risen to their highest level in three and a half years, while futures on the Chicago exchange were up about 40% by September 23 compared with their June lows, as hopes fade for a return of Black Sea exports to their usual pace and climate pressures and energy and fertiliser costs remain elevated.
Price surge puts pressure on food bills
Data from the United Nations Food and Agriculture Organization (FAO) showed that global wheat prices rose 2.6% in August from the previous month, making them about 15% higher than a year earlier. The grain price index also climbed 2.2% during the same month, reaching its highest level since May 2024.
The surge reflects mounting concerns over crops, demand and trade flows, particularly exports passing through the Black Sea. Export restrictions, or fears that they may be imposed, could prompt precautionary purchases by importers, increasing immediate demand and competition for available shipments before the scale of any potential shortfall becomes clear.
Despite the price increase, production estimates do not point to a broad global shortage. The US Department of Agriculture expects large crops in Canada and Australia, while the European Union may offset part of the decline in Black Sea exports. But the market remains highly sensitive to any new disruption that prevents grain from reaching importers at the usual cost and on schedule.
Heat and drought weigh on crop outlooks
Heat and dry weather have led to lower wheat production forecasts in parts of Europe, according to the FAO, while drought has hit crops and domestic supplies in the United States. The US Department of Agriculture expects wheat exports to fall in the 2026-2027 season to their lowest level in 3 years.
The global average temperature between June and August 2026 reached a record high, matching the summer of 2024, according to the Copernicus Climate Change Service. August 2026 was the hottest August on record, with a global average of 16.96 degrees Celsius, 1.65 degrees higher than the month’s average during the pre-industrial period.
In western Europe, summer 2026 recorded the region’s highest average temperature in Copernicus records. The concurrence of heatwaves and drought in more than one production region increases the risk that markets will be less able to offset any decline in a major crop.
Black Sea disruption raises shipping costs
The Black Sea region remains a major route for the global wheat trade given Russia and Ukraine’s role in supplies. In September, the Joint War Committee in London revised the waters included in its war-risk areas in the Black Sea, reflecting rising risks surrounding shipping and ports.
War risks add to marine insurance costs, while port disruptions or difficulties using usual routes may force traders to use more distant ports and higher-cost transport. Russian companies have begun preparing terminals previously used for fertilisers, coal and other commodities at ports on the Baltic Sea and in the Arctic region to export grain after shipping through the Black Sea was disrupted.
Kpler estimates that Russian wheat exports fell to about 1 million tonnes in September, compared with 5 million tonnes a year earlier, while Ukraine’s exports may reach about 1 million tonnes, half their level in the same month last year. These figures are estimates of shipments, not final results.
Energy and fertilisers add new burdens
Wheat costs are linked to energy and fertiliser prices, as natural gas is used to produce nitrogen fertilisers and fuel powers farm equipment and transports crops through the supply chain. The fertiliser price index rose by more than 12% in the first quarter of 2026 from the previous quarter, according to the World Bank, and reached its highest level since October 2022 in April.
The World Bank expects the fertiliser price index to rise by more than 30% during 2026, with urea prices increasing by about 60%. This increase could raise the cost of cultivating a hectare and prompt some farmers to reduce fertiliser use, putting pressure on yields in the following season.
In the United States, the average retail price of diesel was 6.29 dollars per gallon in the week ending September 14, up by about 68% from a year earlier. The figure is the national average diesel price, not a price specific to farmers, but fuel costs accumulate across farming, transport, storage, milling and distribution.
Arab countries and Egypt face import test
Arab importing countries are more sensitive to rising wheat prices because of its connection to food security and bread-subsidy policies, alongside water scarcity and higher temperatures that constrain increases in domestic production. FAO data show that 77.5 million people in Arab countries experienced hunger in 2024, equivalent to 15.8% of the population.
In Egypt, the FAO expects wheat production to reach about 10 million tonnes in 2026, roughly 7% above the average, driven by an expansion in cultivated area. At the same time, the organisation expects the country’s wheat import needs to reach 13.5 million tonnes in the 2026-2027 season.
About 143.9 thousand tonnes of wheat reached Egyptian ports in the first half of September 2026, compared with 876.1 thousand tonnes during the same period a year earlier. The shipments came from Romania, Russia and Ukraine, while Egypt’s supply minister said the country was moving to diversify its sources of purchases, including France and other European suppliers.
Market movements show that the cost of securing wheat is not linked to production volumes alone. It also includes energy, fertilisers, marine insurance, port security, exchange rates and trade policies, increasing pressure on households and public budgets in Arab countries that rely on imports.
