El Niño expected to push food prices higher in Iceland

El Niño is expected to drive up global food prices next year, with Iceland also likely to feel the effects, mbl.is reported.

The Retail Research Centre (RSV), citing a World Bank forecast, said food prices worldwide are expected to rise by 10% this year and a further 7% next year. Klara Símonardóttir, the centre’s director, said some food categories were becoming cheaper, but the overall grocery basket was likely to cost more because of unfavourable growing conditions in places most affected by El Niño. Russia’s invasion of Ukraine was also contributing to the increases, she said.

The World Bank expects global prices for rice to rise by 21% in 2027, palm oil by 15%, sugar by 12% and cocoa beans by 29%.

Símonardóttir said Icelandic importers and producers should closely monitor global prices and how they affect the prices suppliers charge. Lower oil prices could ease the impact, as high fuel costs have increased transport expenses. A strong króna would also help: Icelanders have felt less of this year’s commodity price increases because of favourable exchange-rate movements.