World food prices hit highest since 2022 amid supply fears
FAO reports higher prices across all major food categories in August as extreme weather and conflict threaten supplies and cereal output forecasts fall
- The FAO Food Price Index rose in August to its highest level since November 2022, with all five tracked commodity groups (cereals, vegetable oils, sugar, meat, and dairy) increasing.
- This price surge is driven by growing fears over global food supplies, which are threatened by a combination of extreme weather and geopolitical conflicts.
- Key factors impacting supply include heatwaves and drought in Europe, El Niño concerns in Asia, and escalating attacks in the Black Sea that are disrupting grain shipments.
- Sugar prices saw the sharpest increase at 11.9%, and the FAO has also lowered its forecast for global cereal production, further fueling supply concerns.
World food prices climbed to their highest level since November 2022 in August, as extreme weather and conflict increased concerns about supplies of staple commodities, the Food and Agriculture Organization of the United Nations (FAO) reported on Friday, September 4.
The FAO Food Price Index averaged 133.3 points, up from July’s revised reading of 130.8.
All five categories tracked by the index—cereals, vegetable oils, sugar, meat and dairy products—recorded increases.
Despite the rise, the benchmark remained nearly 17% below its record peak in March 2022, reached after Russia launched its full-scale invasion of Ukraine.
The index measures monthly changes in international prices for a basket of globally traded food commodities.
FAO chief economist Maximo Torero said the August increase signalled that markets were again pricing in greater risk.
Climate shocks, geopolitical tensions and disrupted trade logistics were converging, increasing expectations of tighter supplies.
Weather and conflict threaten supplies
Severe heatwaves and drought in Europe have weakened prospects for maize and sugar beet harvests and affected livestock production.
Concerns about a potentially intensifying El Niño have also clouded the outlook for palm oil and sugar production in Asia.
Meanwhile, escalating attacks in the Black Sea have reduced grain shipments from Russia and Ukraine, four and a half years into their war.
The conflict between the United States and Iran is also putting pressure on fertiliser flows needed for crop production.
Energy costs and Middle East tensions had already contributed to higher food commodity prices earlier this year.
Sugar leads the price increases
The strongest increase among the categories detailed in the report was in sugar, as lower production in Brazil’s important Centre-South growing region compounded weather concerns in Europe and Asia.
- Sugar prices rose 11.9% from July, reaching their highest level since June 2025.
- Cereal prices increased 2.2%, reaching their highest level since May 2024.
- Vegetable oil prices edged up 0.6%, reaching their highest level since June 2022.
FAO’s official figures confirm May 2024 as the previous benchmark for cereal prices.
Cereal production forecast lowered
In a separate report, FAO reduced its forecast for global cereal production in 2026 by 3.4 million tonnes from its July estimate, to 2.980 billion tonnes.
That would represent a 2% decline from 2025, the largest annual fall since 2018. Nevertheless, the projected harvest would still be the second-largest on record.
The forecast for global cereal stocks at the close of the 2026/27 season was also lowered by 1.1% to 947.2 million tonnes, leaving inventories only slightly above the previous season’s level.
A downward revision to coarse grain stocks more than offset an upward revision for wheat. The higher wheat estimate reflected expectations that shipping disruptions would leave more stocks in Russia and Ukraine.
