The ECB's warning for 2027

On Tuesday, 20 October 2026, the European Central Bank published a blog post by four staff economists, Elena Bobeica, Gerrit Koester, Friderike Kuik and Christiane Nickel, warning that food prices in the euro area could start rising again next year. The authors describe a double shock from energy and extreme weather that could reignite price tensions. They say it is still too early to conclude that inflation has lost its bite, and that the recent economic slowdown may prove temporary. The ECB expects food inflation to reach 3.4% in the third quarter of 2027 before it starts to ease. The bank noted that the views belong to the authors and do not necessarily reflect its official position. The warning arrives as France faces wide protests over the high cost of living.

Food inflation has cooled, then ticked up

Eurozone food inflation fell from 2.6% in January 2026 to 1.1% in August, its lowest level since mid-2021, before edging up to 1.3% in September. The September rise came mainly from fresh produce, whose prices respond more quickly to weather. Good European harvests in 2025, particularly in cereals and oilseeds, and lower international prices for coffee, tea, cocoa and sugar had held costs down. Bread, milk and chocolate still weigh heavily on households' sense of inflation. Food is roughly 30% more expensive than at the end of 2021, and household purchasing power for food has not returned to its level before the inflation wave.

2026-01

2.6 %

2026-08

1.1 %

2026-09

1.3 %

Q3 2027 (ECB projection)

3.4 %

Data from the article text

The double shock of energy and weather

The energy shock reaches food costs indirectly, through transport, fertiliser, processing and packaging, and those effects can take months to show up on shelves. Higher natural gas prices raise the cost of producing fertiliser, while higher grain prices can later pass into animal feed and then into dairy and meat. The effect of oil price rises may take years to fully reach food prices, and the impact of natural gas appears with an even longer lag. Heat and drought have also hit crops at a critical point in the 2026 farming season. The ECB's estimates put the weather effect at 0.3 to 0.8 percentage points on food inflation over the next 12 months. Energy-intensive crops such as wheat, maize and barley are expected to face the largest effects.

Greece: sharp swings in the data

Greece's development minister, Takis Theodorikakos, has pointed to a harmonised food inflation figure of -0.4% in July, 0.2% in August and -0.2% in September. He credited government coordination with industry and supermarkets under a National Price Reduction Initiative, while warning against complacency because a difficult winter is coming. Consumers do not feel the relief, since staples such as feta keep getting more expensive. Michalis Sarantis, who chairs the interprofessional feta body and is chief executive of Hellenic Dairies, the sector's largest group, said feta could rise to 16 euros per kilo from 12 to 13 euros, a 33% increase if confirmed. Shortages of sheep's milk and rising exports are cited as drivers. Greece's economic team fears pressures will become more visible from November, when a price-holding initiative launched in late August expires.

Global crop outlook

S&P warned of a sharp fall in global agricultural production, linking it to prolonged disruption of energy and fertiliser flows and to the possibility of a particularly strong El Niño. The agency cut its Brazil corn forecast by 6 million tonnes to 137 million tonnes. Its soybean forecast was lowered by the same 6 million tonnes, to 177 million tonnes. If adverse weather intensifies, the losses could widen and add pressure to international food markets.

Brazil corn forecast137

Brazil soybean forecast177

Brazil corn forecast

137 million tonnes

Brazil soybean forecast

177 million tonnes

Data from the article text