The FAO Food Price Index, which tracks monthly changes in international prices for major food commodities, averaged 133.3 points in August, up from a revised 130.8 points in July.
This was the highest level since November 2022. However, the index remains almost 17% below the record reached in March 2022 following the start of Russia’s full-scale invasion of Ukraine.
FAO Chief Economist Maximo Torero said the August increase indicated that a “risk premium” was returning to food markets, as climate shocks, geopolitical tensions and disruptions to trade logistics were simultaneously worsening supply expectations.
Cereals and Sugar Record the Sharpest Increases
The FAO Cereal Price Index rose by 2.2% in August compared with July, reaching its highest level since May 2024.
The Vegetable Oil Price Index increased by 0.6%, rising to its highest level since June 2022.
Sugar recorded the sharpest increase: the FAO Sugar Price Index jumped by 11.9% to its highest level since June 2025. According to the FAO, the rise was driven by lower production in Brazil’s key Centre-South region, as well as adverse weather conditions in Europe and Asia.
International prices for meat and dairy products also increased.
Weather Risks Add Pressure to the Market
Extreme heat and drought in Europe have worsened prospects for maize and sugar beet harvests and also affected livestock production.
Further concern is being caused by the possibility of a strong El Niño event, which could negatively affect palm oil and sugar production in Asia.
Disruptions to trade in the Black Sea region remain another important factor. Intensified attacks have restricted grain shipments from Russia and Ukraine. In addition, the conflict between the United States and Iran is creating further risks for fertiliser supplies.
FAO Cuts Global Cereal Production Forecast
In a separate report, the FAO lowered its forecast for global cereal production in 2026 by 3.4 million tonnes compared with its July estimate, to 2.980 billion tonnes.
This would be 2% lower than in 2025 and would represent the largest annual decline in production since 2018. Nevertheless, the projected volume would still be the second-highest on record.
The forecast for global cereal stocks at the end of the 2026/27 season was also reduced by 1.1% to 947.2 million tonnes, only slightly above the previous season’s level.
The expected decline in coarse grain stocks outweighed an upward revision to the wheat outlook. In the latter case, the FAO expects larger stocks to accumulate in Russia and Ukraine due to shipment disruptions.
PigUA.info, based on materials from FAO