Regional war drives global food inflation, poses risks for Pakistan

The State Bank of Pakistan has warned that food prices may climb faster than previously anticipated, a shift that could become a global concern. Dawn reported that the central bank's biannual monetary policy report, issued on Monday, said the regional conflict had a more serious effect on food prices in countries such as Pakistan. The report also linked higher oil prices to costlier fertiliser, which in turn weighed on the agricultural sector.

Pakistan's farm sector already faces water shortages from an outdated irrigation system, while modern technology has seen limited uptake and input costs for fertiliser, electricity and seeds remain high. The report also says disruption to Qatari gas supplies, a source of roughly 19 per cent of global LNG shipments, pushed fertiliser prices higher and lifted farm commodity prices. Food exports dropped 25pc in FY26 to $4.744 billion from $6.330bn in FY25, with rice shipments recording the steepest fall.

The central bank also noted that the IMF has lowered its estimate of worldwide inflation-adjusted economic growth for CY26, mainly because of weaker expectations in energy-importing nations. Dawn added that the global food price index used in the analysis tracks grains, sugar, edible oils and meats, as published by the World Bank.