JP Morgan's latest report states that under the sustained impact of five major factors including wars, weather, storage, water resources and waste, a global food crisis may break out next year. Is the food crisis really coming?

Recently, international financial institutions such as Goldman Sachs, HSBC, Bank of America, and JP Morgan Chase have issued warnings one after another. The superposition of multiple risks is likely to trigger a new round of grain inflation. The capital market reacted immediately: the planting sector in the A-share market soared, many stocks including Nongfa Seed Industry hit the daily limit, and grain ETFs all moved up.

JP Morgan's latest report states that under the sustained impact of five major factors including wars, weather, storage, water resources and waste, a global food crisis may break out next year. Is a food crisis really coming?

Is a food crisis about to break out next year = Will there not be enough food to eat next year?

One of the main reasons why JP Morgan Chase concludes that a global food crisis may break out next year is that shipping in the Strait of Hormuz has been frequently blocked, which directly involves about one-third of the world's urea transportation and energy trade. Coupled with the restricted export of natural gas by Russia, the supply of key raw materials for nitrogen fertilizer production is tight. Energy and fertilizer prices have risen, and through layer-by-layer transmission, they ultimately push up the cost of grain production.

Zhong Yu, a researcher at the Institute of Agricultural Economics and Development, Chinese Academy of Agricultural Sciences, pointed out that another reason is the impending super El Niño. According to forecasts, there is a 70% probability that a historic El Niño event will occur from October to December 2026, and its intensity will be relatively strong. A typical El Niño event may last for nearly a year, so it is likely to affect grain and agricultural production in 2027, bring uncertainty to global grain and cereal yields, and may exert downward pressure on output.

There's no shortage of grain to buy on the market, so where exactly is the crisis in the food crisis?

Hu Bingchuan, a researcher at the Institute of Rural Development of the Chinese Academy of Social Sciences, stated that in terms of global grain stocks, the total volume remains sufficient. In the short term, there is no scenario of a global grain harvest failure or depletion of physical supply. Overall, the foundation of current global food security is relatively solid. The latest report from the Food and Agriculture Organization of the United Nations shows that the global grain output in 2026 will be approximately 3 billion tons, with stocks close to 1 billion tons, endowing strong capabilities for emergency regulation and buffering. Therefore, the report by JP Morgan Chase is more of a risk warning. However, from the perspective of future actual developments, close monitoring is still required. Although it is a low-probability event, it cannot be taken lightly, as its consequences could be extremely severe. Thus, it is necessary to continuously track changes in weather, geopolitics, regional yields, and the global agricultural supply chain, and strive to keep the overall risks and potential impacts within a limited scope.

However, sufficient total supply does not mean there is no crisis. Hu Bingchuan emphasized that on the one hand, the problem of uneven global food supply persists, and how to put food on the table remains an unsolved major issue in some countries and regions. On the other hand, the form of contemporary food crises is no longer just about a shortage of food.

Hu Bingchuan: In recent years, the entire food crisis has more become an economic behavior. After food prices soar, some developing countries, especially the least developed countries, lack sufficient foreign exchange and cannot effectively purchase food from the international market. In fact, the international food market has a relatively sufficient supply. Therefore, the modern food crisis also includes an economic concept to a certain extent: many low-income groups in developing countries cannot effectively obtain a reliable source of food, falling into famine or widespread poverty.

JP Morgan Chase predicts that the global food inflation rate will rise from 2.8% in the first half of 2026 to 5% in the first half of 2027. This round of rising food inflation is more of a cost crisis caused by supply disruptions coupled with cost increases, meaning there is grain but it is not necessarily affordable.

How should China respond to the global food crisis?

What many people are more concerned about is: if a global food crisis really comes, will this storm hit our dinner tables? Will China's food system be affected?

Overall, the self-sufficiency rate of China's staple grains has remained at a high level. With consecutive bumper harvests and sufficient reserves, we have consolidated the foundation to resist external shocks, which is the source of our greatest sense of security. The National Bureau of Statistics announced today that the total output of early rice in China in 2026 reached 56.58 billion jin, stably above 56 billion jin for six consecutive years, maintaining overall stability. So far, this year's grain output has been steady. Hu Bingchuan, a researcher at the Institute of Rural Development of the Chinese Academy of Social Sciences, also provided a data that further boosts our confidence.

Hu Bingchuan: At present, China's grain output exceeds 700 million tons. Nearly half of the global grain inventories are held in China. Therefore, China's food security actually provides an important guarantee for global food security and the supply of the agricultural product market.

Against the volatile global grain market, China has injected a precious sense of certainty in its own way. As a country with a large population in the world, the Chinese people firmly holding the rice bowl in their own hands is a contribution to global food security.

With the global situation like this, should we rush to stock up on grain at home?

Hu Bingchuang: From an individual and family perspective, there is no need to stock up on large quantities of grain as soon as there is a risk warning. China's food security system, whether in terms of the production system or the reserve system, is very solid. From a life perspective, it is reasonable to maintain some necessary daily reserves. When typhoon warnings were issued this year, many families stocked up on a bit more rice, flour and oil, which is quite reasonable to cope with short-term sudden changes in weather and logistics. However, there is no need for large-scale grain hoarding.

Zhong Yu said that hoarding large quantities of grain is not only unnecessary but also brings negative impacts. For individuals and families, purchasing grain at a normal pace, together with practicing strict thrift and cherishing grain, are the simplest and most practical actions to safeguard food security.

Zhong Yu: From an economic perspective, such a sudden explosive increase in demand has instead driven up grain prices, and ultimately harms the interests of us consumers. Therefore, for individual families, we should follow a normal rhythm. Excessive storage will lead to a decline in quality, which will affect the taste and appetite. We should trust the country's capacity to ensure stable grain production and supply.

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