The global food price index reached its highest level since November 2022 in August, at 133.3 points, according to data from the Food and Agriculture Organization of the United Nations (FAO). The index rose 1.9% month-on-month and 2.5% year-on-year. The index tracks international prices for food commodities: cereals, vegetable oils, meat, dairy, and sugar. All five groups saw price increases in August.
The most significant rise occurred in the sugar market, up 11.9% month-on-month, reaching its highest level since June 2025. The FAO attributes this to deteriorating sugar beet yield forecasts in the European Union, lower production in Brazil, and concerns over crops in Asia due to El Niño. Additional upward pressure came from India's decision to allow duty-free imports of raw sugar.
Wheat prices rose 2.6% compared to July and 15% compared to August last year. The FAO cites disruptions to export logistics in the Black Sea and deteriorating crop prospects in Europe following heat and drought. Corn prices increased 2.5% month-on-month, influenced by weather conditions in the US and EU, disruptions to Ukrainian exports, and concerns over supplies of agricultural inputs after the closure of the Strait of Hormuz.
Dairy prices rose 2.3%, and meat prices increased 1%. The vegetable oil price index reached its highest level since June 2022, although sunflower and rapeseed oils saw slight declines. The overall food index remains 16.8% below the record high of March 2022.
FAO Chief Economist Máximo Torero explained the August rise as a return of a risk premium to food markets. He noted that climate shocks, geopolitical tensions, and trade logistics disruptions are simultaneously worsening supply expectations. He stressed that open trade and reliable supplies of agricultural inputs are necessary for price stability.
At the same time, the FAO lowered its forecast for global cereal production in 2026 to 2.98 billion tonnes, 2% below last year's level. Even so, this would be the second-largest harvest on record. The organization expects wheat stocks to accumulate in Russia and Ukraine due to restrictions on Black Sea exports and insufficient capacity of alternative routes. Overall, the ratio of global cereal stocks to consumption remains relatively favorable by historical standards.
In the first ten days of August, Russian grain was shipped through 8 ports, compared to 29 a year earlier. Countries in North and East Africa and the Middle East drew down domestic stocks, postponing purchases of more expensive wheat from alternative suppliers.
Another source of risk is fertilizer disruptions due to the war between the US, Israel, and Iran. Before shipping was disrupted, about a third of global nitrogen fertilizer trade passed through the Strait of Hormuz. After shipments stopped, producers in various countries began cutting output, and market participants warned that fertilizer shortages would affect crop yields and food prices within a few months.