World Food Prices Hit Nearly 4-Year High, FAO Warns of Supply Risk

World Food Prices Hit Nearly 4-Year High, FAO Warns of Supply Risk

Global food prices rose in August to their highest level since late 2022, the UN Food and Agriculture Organization (FAO) reported, driven by extreme weather and fallout from the Black Sea war. The FAO Food Price Index averaged 133.3 points in August, up from a revised 130.8 in July — the highest since November 2022, though still about 17% below the record set in March 2022 after Russia's full invasion of Ukraine.

FAO chief economist Maximo Torero said the August rise signals that risk premiums are returning to food markets, with climate shocks, geopolitical tension, and trade-logistics disruptions converging at once. Grain, vegetable oil, sugar, meat, and dairy prices all rose in August: grain prices climbed 2.2% to their highest since May 2024, largely due to severe European weather hitting corn and sugar-beet yields plus livestock output, while concerns over a potential El Niño weighed on Asian palm oil and sugar outlooks. The sugar price index jumped 11.9% to a 2025 high, on lower output from Brazil's key central-south region. Intensifying Black Sea attacks have also reduced Russian and Ukrainian grain shipments, 4.5 years into that war, while US-Iran tensions are straining fertilizer flows.

Separately, FAO cut its 2026 global grain production forecast by 3.4 million tons from July's estimate, to 2.98 billion tons — down 2% from 2025 and the largest annual decline since 2018, though still the second-highest harvest on record. World grain stocks for end-2026/27 were also trimmed 1.1% to 947.2 million tons, only slightly above last season, with FAO noting cuts to coarse-grain stock estimates outweighed an upward revision for wheat, reflecting expected stock buildups in Russia and Ukraine due to shipping disruptions.