Food Prices Climb to Highest Since 2022

The United Nations Food and Agriculture Organization’s (FAO) food price index reached 133.3 points in August, up from 130.8 in July. It was the highest reading since November 2022, although it remained nearly 17% below the record set in March of that year.

All monitored categories, including grains, vegetable oils, sugar, meat and dairy products, rose. Markets were unsettled by extreme heat and drought in Europe, the threat of a strong El Niño event and trade disruptions caused by the war in Ukraine and the US-Iran conflict.

Adverse weather has worsened the outlook for corn and sugar beet harvests as well as livestock production. The expected El Niño event is also raising concerns about vegetable oil and sugar output.

Intensifying attacks in the Black Sea have restricted grain exports from Russia and Ukraine, while the US-Iran conflict continues to complicate fertilizer supplies. According to FAO chief economist Maxime Torer, climate shocks, geopolitical tensions and logistical challenges are collectively worsening the supply outlook.

The FAO has lowered its estimate for global grain production in 2026 by 3.4 million metric tons to 2.98 billion metric tons. That would represent a 2% decline from last year, but would still make it the second-highest harvest on record.

(Reuters, bak)