Global food prices rose in August to their highest since late 2022 as adverse weather and war disruptions in the Middle East as well as the Black Sea heightened concern over supply of staples, according to United Nations’ Food and Agriculture Organisation (FAO).
The FAO Food Price Index (FFPI) averaged 133.3 points in August; up 1.9% from July and 2.5% higher than last year, marking the highest level since November 2022.
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.
“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.
The FAO also has cut its 2026 global cereal production forecast by 3.4mn metric tonnes from a previous estimate in July to 2.980bn tonnes, now 2.0% below 2025 in the largest annual decline since 2018.
Wheat prices jumped 15% from last year, in part due to “persistent disruptions to Black Sea export logistics” linked to Russia’s invasion of Ukraine, the FAO said.
It also noted that “concerns over input supplies following the closure of the Strait of Hormuz provided additional support to maize prices”, which climbed 2.5%.
The closure of the strait due to the Mideast war has caused a surge in fuel prices but also closed off a major source of fertiliser supplies, compounding concerns about supplies and higher prices over the longer term.
The conflict in the Middle East could push millions more towards hunger as its economic fallout reverberates further around the globe, then World Bank’s chief economist said in April.
“You have about 300mn people who suffer from acute food insecurity already,” Indermit Gill said. “That’ll go up by about 20% very, very quickly” as knock-on effects grow.
The price of fossil fuels and fertilisers are intimately linked, says the UN Conference Trade and Development: Oil and gas processes provide inputs to its manufacture.
Natural gas is used in the Arabian Gulf region to create urea, used in the nitrogen fertiliser that is critical to boosting agricultural yields.
Hormuz is a key choke point for exporting it.
This latest crisis – after the Ukraine war energy shock and the global health emergency of the coronavirus (Covid-19) pandemic – is also hitting “at a time when many developing economies struggle to service their debt”. Import-dependent countries in Asia, Africa, and Latin America are particularly exposed to fertiliser shortages and rising input costs, according to the FAO.
While farmers in rich nations can count on support from their governments, concerns are mounting over some of the poorest economies.
Higher food prices will complicate efforts by central banks to get a post-pandemic wave of inflation back under control.
The situation also presents a challenge for politicians, especially in emerging-market economies where food eats up a greater proportion of household incomes than it does in more industrialised nations.
As many as 45mn more people could face acute hunger if the conflict in Iran doesn’t ease by the middle of the year, taking the total number to a record high, the UN World Food Programme has warned.