World food prices at highest since 2022 as supply risks mount, says FAO
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 agricultural markets.
World food prices reached a three-year high in August, according to the United Nations Food and Agriculture Organization (FAO), with grain prices surging to a three-year peak and sugar hitting a one-year maximum. The Food Price Index, which tracks monthly changes in a basket of internationally traded food commodities, averaged 133.3 points in August, up from July's revised reading of 130.8.
This increase is attributed to adverse weather conditions, geopolitical tensions, and supply disruptions caused by the Ukraine-Russia war and the US-Iran conflict. The FAO's Chief Economist, Maximo Torero, warned that the risk premium is returning to food markets, as climate shocks, geopolitical tensions, and disrupted trade logistics are tightening supply expectations.
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