Global food commodity markets are expected to remain relatively well supplied through 2026 despite mounting geopolitical tensions, El Niño risks and persistent uncertainty in energy and fertilizer markets, according to the Food and Agriculture Organization's (FAO) latest Food Outlook.
The report says the global economy has remained resilient, but slower growth, volatile energy markets, changing trade policies and exchange-rate movements continue to cloud prospects for agricultural trade and food prices. While production remains robust across most commodities, weather uncertainties and geopolitical conflicts could disrupt markets in the coming months.
Global cereal production reached a record 3.043 billion tonnes in 2025-26, up 6.1 percent from the previous year. Utilisation is estimated at 2.952 billion tonnes, while cereal stocks are forecast at 952.2 million tonnes, 9.5 percent above opening levels. Global cereal trade is projected to increase 4.8 percent to 508.6 million tonnes, supported by stronger wheat and coarse grain shipments despite lower rice trade. Looking ahead, cereal output is expected to ease in 2026-27 but remain historically high.
Global wheat production is forecast to decline in 2026 due to lower output among major exporter countries, while trade is expected to contract because of reduced exportable supplies and softer import demand. Rice markets, meanwhile, have recovered from multi-year price lows, although production in 2026-27 could fall 1.6 percent because of El Niño-related weather risks and high input costs. The FAO All Rice Price Index averaged 104.8 points in May 2026, up 6.6 percent from October 2025.
Coarse grain production is also expected to decline from last season's record, largely because of lower maize output, although supplies remain comfortable. Oilseed markets continue to expand, with global oilseed production forecast at 721.7 million tonnes, up 2.1 percent. Vegetable oil production is projected to rise 1.4 percent, but strong demand from the biofuel sector is expected to keep vegetable oil markets tight. Between January and May 2026, FAO's vegetable oil price index rose 15.9 percent year-on-year.
The international sugar market is expected to shift into surplus during the 2025-26 season. World sugar production is forecast at 183.2 million tonnes, an increase of 3.5 percent, driven mainly by higher output in Thailand and other Asian producers. However, energy market developments and disruptions to trade routes in the Near East remain important risks for prices and exports.
The fisheries and aquaculture sector is forecast to produce 200.5 million tonnes in 2026, up 1 percent from 2025. Growth will come entirely from aquaculture, which is projected to increase 2.9 percent to 108.7 million tonnes, while capture fisheries decline 1.1 percent. Global fish trade is expected to reach USD 202.3 billion, although traded volumes are likely to remain broadly stable at 71.1 million tonnes.
Market indicators show international food prices have strengthened since the beginning of 2026. The FAO Food Price Index averaged 130.8 points in May, 3.5 percent above October 2025 levels but still 18.4 percent below its March 2022 peak. Higher cereal, vegetable oil and meat prices offset declines in dairy prices, while sugar prices changed little overall. The cereal price index rose 10.1 percent, vegetable oils gained 9.2 percent, and meat prices increased 4.4 percent during the review period. Elevated freight costs, food import bills and geopolitical tensions continue to pose risks to global food affordability and trade.