Global Food Prices Hit Over Three-Year High Amid Energy Shock, FAO Says

FAO Website

Wheat grains.

World food prices rose in April to their highest level in more than three years, driven largely by surging vegetable oil costs linked to the Iran conflict and disruptions affecting global energy flows, according to the Food and Agriculture Organization (FAO).

The FAO said its Food Price Index increased for a third consecutive month, reaching an average of 130.7 points in April. This represents a 1.6% rise from March and the highest level since February 2023, according to Caliber.Az, citing international media reports.

The agency noted that vegetable oil prices recorded the sharpest increase, rising 5.9% month-on-month to their highest level since mid-2022. The surge was driven by higher prices for soy, sunflower, rapeseed and palm oil, with the latter also supported by rising demand linked to biofuel production.

FAO Chief Economist Máximo Torero said elevated energy prices were feeding into higher costs for vegetable oils, partly due to increased demand for biofuels derived from oil-rich crops. He attributed the trend to broader energy market disruptions associated with the conflict involving Iran and reduced stability in key maritime routes, including the Strait of Hormuz.

Despite these pressures, Torero said global food systems have remained broadly resilient. He added that cereal prices rose only marginally due to sufficient stockpiles from previous harvests.

Cereal prices increased by 0.8% month-on-month and were up 0.4% year-on-year, reflecting modest gains in wheat and maize prices amid weather-related concerns, higher fertiliser costs and continued biofuel demand. The FAO also warned that wheat planting in 2026 could decline as farmers shift towards less fertiliser-intensive crops in response to rising input costs.

Meat prices rose 1.2% in April to a record high, driven by limited cattle supply in Brazil. In contrast, sugar prices fell 4.7%, reflecting expectations of strong output from Brazil, China and Thailand.

The FAO said global agri-food markets continue to demonstrate overall resilience despite geopolitical tensions and energy market volatility. In a separate update, the agency slightly raised its forecast for 2025 global cereal production to a record 3.040 billion metric tonnes, approximately 6% higher than the previous year.




PUKMEDIA