World food prices at highest since 2022 as supply risks mount, FAO says
PARIS: World food prices rose in August to their highest since late 2022, as adverse weather and war disruption in the Black Sea heightened concern over supply of staples, the United Nations’ Food and Agriculture Organization said on Friday. Extreme heat and drought in Europe, the threat of a severe El Nino weather pattern and trade upheaval caused by the Ukraine and Iran wars have unsettled…
In August, global food prices surged to their highest level since late 2022, as adverse weather conditions and conflict disruptions in key regions threatened the supply of essential staples, according to the United Nations' Food and Agriculture Organization (FAO). The FAO Food Price Index, which measures monthly changes in a basket of traded food commodities, averaged 133.3 points in August, a mark not seen since November 2022.
This was a 17% increase from the previous month's revised reading of 130.8, marking the highest score since March 2022, following Russia's invasion of Ukraine.
The rise in food prices is attributed to various factors, including extreme heat and drought in Europe, the potential impact of a severe El Nino weather pattern, and trade upheaval stemming from the conflicts in Ukraine and Iran. FAO Chief Economist Maximo Torero emphasized that the risk premium is resurfacing in food markets due to climate shocks, geopolitical tensions, and disrupted trade logistics, tightening supply expectations.
The price increases were observed across multiple food categories. Cereal prices, vegetable oil prices, and sugar prices all reached their highest levels in the respective periods. The extreme weather in Europe impacted the maize (corn) and sugar beet harvests, as well as livestock production. The anticipated El Nino phenomenon raised concerns about palm oil and sugar output in Asia.
Conflict in the Black Sea, where Russia and Ukraine are engaged in a four-and-a-half-year war, has disrupted grain shipments from these nations. Additionally, the U.S.-Iran conflict has strained the supply of fertilizers necessary for crop growth. In August, Pakistan announced a comprehensive strategy to bolster food security and safety.
The FAO's cereals price index rose by 2.2% month-on-month to its highest since May 2024, while the vegetable oil index increased by 0.6% to its highest since June 2022. The agency's sugar benchmark surged by 11.9% to its highest since June 2025, primarily due to lower production in Brazil's crucial center-south region and weather concerns in Europe and Asia.
Consequently, the FAO revised its 2026 global cereal production forecast downward, reducing it by 3.4 million metric tons from a previous estimate in July to 2.980 billion tons. This represents a 2.0% decline from the 2025 level, marking the second-largest annual decrease since 2018. Despite the decline, projected cereal stocks for the close of the 2026/2027 season were slightly increased to 947.2 million tons, marginally above the previous season's level.
The FAO attributed the reduced estimate of coarse grain stocks to an upward revision for wheat, primarily due to the anticipated buildup of Russian and Ukrainian stocks amidst shipping disruptions.
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