Durrant Pate/Contributor

The Bank of Jamaica (BOJ) is sounding the warning bells regarding elevated food prices in the next two years due to rising grain costs, which are set to remain elevated over the next two years.

In its Monetary Policy Report for May 2026, which was tabled in the Senate last Friday, the BOJ is reporting that average grain prices for the March 2026 quarter increased by 5.2 per cent, relative to the December 2025 quarter. This is an increase of 4.4 per cent on an annual basis.

The increase in the March 2026 quarter was associated with higher prices for corn (3.5 per cent for the quarter and 2.5 per cent decline on an annual basis), soybeans (4.8 per cent increase for the quarter and 10.4 per cent rise on an annual basis), and wheat prices went up (7.5 per cent for the quarter and 0.3 per cent rise on an annual basis). 

The increase in average grain prices largely reflected high average US grain exports and higher input costs (fertiliser, freight and fuel) in the March 2026 quarter relative to the previous quarter. Prices were further supported by unfavourable weather conditions in the US and South America.

The average price of grains is projected to be US$313.08 per metric ton for the next eight quarters (June 2026 to March 2028). 

More rise on the horizon

“It is forecasted that prices will increase to June 2026and moderate thereafter. In this context, average grain prices are projected to increase by 12.7 per cent in FY2026/27 relative to FY2025/26. This compares to the previous forecast for an increase of 1.6 per cent to US$287.33 per mt for the fiscal year. For FY2027/28, average grain prices are forecast to decline by 5.8 per cent to average US$303.75 per mt, relative to the previous fiscal year,” the BOJ is reporting.

This is relative to the previous forecast for a decline of 1.7 per cent to US$282.39 per metric ton  for the period. In the optimistic case for the June 2026 to March 2028 quarters, the average grain price is projected to be lower on average by US$23.13 per metric ton relative to the mild case. Prices are expected to rise to May 2026 due to higher.

The US is operating close to the apex of its export capacity in March 2026. In the March 2026 quarter, fertiliser prices increased by 17.1 per cent, and freight prices rose by 13.0 per cent, relative to the December 2025 input costs and higher than anticipated prices at the beginning of the forecast period and moderate thereafter.

In this context, the BOJ says average increase in grains prices for FY2026/27 could be lower than the current mild case by 5.9%. In the severe case, the near term average price, is projected to be higher on average by US$39.53 per metric ton relative to the mild case. 

Prices are expected to increase month over month up to June 2026 and remain unchanged until March 2027 due to a prolonged impact of the conflict on agricultural input prices. Thereafter, prices are projected to decline from the June 2027 quarter onwards. 

According to the BOJ, “this supports a higher average increase in grains prices by 14% relative to the base. The risks to the forecast for grains prices are assessed to the upside. On the upside, higher input 

costs stemming from the Middle East conflict could cause a more severe disruption to supply than expected.”