World food prices at highest since 2022 as supply risks mount
August’s increase in global food prices is a warning that the risk premium is returning to food markets
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[PARIS] World food prices rose in August to their highest since late 2022, as adverse weather and war disruption in the Gulf and Black Sea heightened concern over supply of staples, the United Nations’ Food and Agriculture Organization (FAO) said on Friday (Sep 4).
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, pushing grain prices to three-year highs and sugar to a one-year peak.
The FAO 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.
That was the highest score since November 2022, though nearly 17 per cent below a record peak from March 2022, after Russia’s full-scale invasion of Ukraine.
“August’s increase in global food prices is a warning that the risk premium is returning to food markets: climate shocks, geopolitical tensions and disrupted trade logistics are converging to tighten supply expectations,” FAO chief economist Maximo Torero said in a statement.
The FAO’s price benchmarks for cereals, vegetable oils, sugar, meat and dairy all rose in August.
The extreme weather in Europe affected prospects for the maize and sugar beet harvests as well as livestock output, while the anticipated El Nino phenomenon fuelled concerns for vegetable oil and sugar output, it said.
Escalating attacks in the Black Sea have curtailed grain shipments from Russia and Ukraine in their 4½ year-old war, while the US-Iran conflict was still straining flows of fertiliser for crops.
In a separate report, the agency cut its 2026 global cereal production forecast by 3.4 million metric tons from July to 2.980 billion tons, now 2.0 per cent below 2025, though still the second-largest harvest on record. REUTERS
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