Bank of Jamaica projects higher grain prices through 2028

The Bank of Jamaica is cautioning that food costs could face added pressure over the next two years as global grain prices remain high.

In its May 2026 Monetary Policy Report, tabled in the Senate last Friday, the central bank said average grain prices rose 5.2 per cent in the March 2026 quarter when compared with the December 2025 quarter. Against the same period a year earlier, prices were up 4.4 per cent.

The quarterly movement was driven by higher prices for major grains. Corn increased by 3.5 per cent for the quarter, although it was down 2.5 per cent year over year. Soybean prices climbed 4.8 per cent in the quarter and were 10.4 per cent higher annually. Wheat moved up 7.5 per cent for the quarter and recorded a 0.3 per cent annual rise.

The BOJ said the overall gain in grain prices was mainly tied to strong average United States grain exports and costlier inputs, including fertiliser, freight and fuel, during the March 2026 quarter. Poor weather in the US and South America also helped to keep prices firm.

For the eight quarters from June 2026 to March 2028, average grain prices are projected at US$313.08 per metric ton.

The central bank said prices are expected to climb up to June 2026 before easing afterward. On that basis, average grain prices are projected to rise by 12.7 per cent in fiscal year 2026/27 compared with fiscal year 2025/26. That is well above the earlier forecast of a 1.6 per cent increase to US$287.33 per metric ton for the fiscal year.

For fiscal year 2027/28, the BOJ expects average grain prices to fall by 5.8 per cent to US$303.75 per metric ton when compared with the prior fiscal year. The previous projection had been for a 1.7 per cent decline to US$282.39 per metric ton.

Under the optimistic scenario for June 2026 to March 2028, the average grain price is projected to come in US$23.13 per metric ton below the mild-case forecast. The report also noted that the United States was operating near the top of its export capacity in March 2026.

Input costs also rose sharply in the March 2026 quarter. Fertiliser prices increased by 17.1 per cent and freight costs advanced by 13.0 per cent compared with the December 2025 quarter.

In that optimistic case, the BOJ said the increase in average grain prices for fiscal year 2026/27 could be 5.9 per cent lower than the current mild-case estimate.

In the severe scenario, the near-term average price is forecast to exceed the mild case by US$39.53 per metric ton. Prices are expected to rise month by month up to June 2026 and then hold steady until March 2027, reflecting a longer impact from conflict on agricultural input prices. After that, prices are projected to start falling from the June 2027 quarter.

The BOJ said that outcome would support a 14 per cent higher average increase in grain prices relative to the base case. It assessed the risks to the grain-price forecast as tilted upward, warning that input-cost increases linked to the Middle East conflict could create a sharper-than-expected supply disruption.