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Your next trip to the grocery store could lead to sticker shock. When global conflicts arise, the tension affects prices, causing food prices to skyrocket – especially everyday items.
“Geopolitical disruptions in key trade sectors inevitably create impacts on global supply chains, particularly for sectors such as food and beverage, retail and fashion that rely heavily on international sourcing and tightly managed inventory cycles,” said John Bahl, CEO of . linworksWho has experience in product strategy in commerce operations.
As the Iran war escalates, prices of many basic grocery items are expected to rise as many of the countries involved in the conflict play major roles in international trade.
“When ports are closed or shipments are delayed, global supplies are cut off almost overnight,” said Arjan Singh, founder and managing partner of . corporate war gameWho has helped shape the go-to-market plans of many companies.
Here are three key things that typically escalate during global conflict.
Wheat-based foods like bread and pasta can grow faster
Chances are bread, pasta, cereals and other wheat-based items are on your list. Singh said they could jump 40% or more.
“It’s not just physical shortages; governments may also restrict exports to protect their populations, leading to higher prices,” Singh said.
Cooking oil prices may rise if supply is disrupted
Cooking oil prices rise because production is restricted to certain areas, and when a major supplier is affected, there are not many quick solutions.
“Food manufacturers started switching to whatever oil they could find, which created a ripple effect across the entire category,” Singh said. “As a result, prices for things like sunflower or vegetable oil can increase dramatically – sometimes doubling – as demand suddenly changes when supply is disrupted.”
Corn prices could push up meat and dairy costs
Corn is not only the basis of many people’s diets, but also the basis of animal feed. When there is a supply disruption, it affects popular packaged foods and “the entire protein chain,” Singh said.
“The initial surge in corn may have been sharp, but the bigger impact is as follows: higher costs to raise livestock, which translates into higher prices for consumers,” he explained. “That’s why meat and dairy prices rise slowly but remain high for a long time.”
As farmers are forced to contend with rising fuel, operating and food costs, higher prices are passed on to consumers.
“Unlike grains, where prices can rise and fall relatively quickly, protein prices are stable,” Singh said. “Once they go up – often 10% to 30% or more – they remain high for a long time as it takes time for herds to rebuild and supplies to stabilize.”
Keeping track of price tags, buying in bulk, and planning for these key items can make rising costs easier to manage.
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