Global food prices hit three-year high as climate shocks and wars tighten supplies

The United Nations' Food and Agriculture Organization said the Food Price Index reached 133.3 points in August, the highest level since late 2022 and still well below the March 2022 record. Climate extremes, including severe heat and drought in Europe, reduced prospects for corn, sugar beet and animal products, while a looming El Niño raised concerns for Asian palm oil and sugar harvests. Ongoing hostilities in the Black Sea have limited grain exports from Russia and Ukraine, and the U.S.-Iran conflict is disrupting fertilizer supplies.

As a result, cereal prices rose 2.2% month-on-month, vegetable oil edged up 0.6%, and sugar jumped 11.9%, each hitting their highest points in several years. The FAO also lowered its 2026 global cereal production forecast by 3.4 million tonnes, marking the steepest annual decline since 2018, though total output remains near historic highs. Revised cereal stock estimates show a slight dip, with coarse grain stocks falling more than wheat stocks, which are expected to rise due to anticipated Russian and Ukrainian surpluses.