Global Food Prices Hit Highest Level Since 2022—FAO

By Adedapo Adesanya

World food prices rose in August to their highest since late 2022, the United Nations’ Food and Agriculture Organisation (FAO) said on Friday.

According to FAO, extreme heat and drought in Europe, the threat of a severe El Niño 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 FAO Cereal Price Index averaged 116.3 points in August, up 2.5 points (2.2 per cent) from July and marking its highest level since May 2024. International cereal prices increased across all major grains in August, supported by robust demand, weather-related concerns over crop prospects in key producing regions, and continued uncertainty surrounding Black Sea export flows.

The FAO Dairy Price Index averaged 119.2 points in August, up 2.7 points (2.3 per cent) from July, marking its first increase in four months, while it remained 21.7 per cent below its level a year earlier.

The increase was driven by higher milk powder and cheese prices, while butter quotations were broadly stable. Skim milk powder (SMP) and whole milk powder (WMP) prices rose by 3.0 per cent and 2.4 per cent, respectively, as firmer quotations in the European Union more than offset seasonal declines in Oceania.

The FAO Sugar Price Index averaged 106.4 points in August, up 11.3 points (11.9 per cent) from July and reaching its highest level since June 2025. The price increase mostly stemmed from growing concerns over the global sugar supply outlook in the 2026/27 season.

The extreme weather in Europe affected prospects for the maize and sugar beet harvests as well as livestock output, while the anticipated El Niño 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 four-and-a-half-year-old war, while the US-Israeli war on Iran 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.