Global Food Prices Rise for Third Straight Month as Energy Costs, Hormuz Crisis Disrupt Markets: FAO

Global food commodity prices continued their upward trend in April, rising for the third consecutive month as higher energy costs and supply disruptions linked to the conflict in the Near East pushed up prices across several major food categories, according to the latest Food and Agriculture Organization (FAO) Food Price Index.

The FAO Food Price Index, which measures monthly changes in international prices of globally traded food commodities, averaged 130.7 points in April. This marked a 1.6 percent increase from the revised March level and was 2 percent higher compared to the same period last year.

According to FAO, rising crude oil prices and disruptions associated with the effective closure of the Strait of Hormuz have increased transportation and fertilizer costs, affecting agricultural markets worldwide. The pressure was particularly visible in cereals, vegetable oils, meat and rice markets.

The FAO Cereal Price Index rose by 0.8 percent from March and remained 0.4 percent higher year-on-year. Wheat prices increased by 0.8 percent amid drought concerns in parts of the United States and expectations of below-average rainfall in Australia. FAO also noted concerns over reduced wheat sowing in 2026 as farmers increasingly shift towards less fertilizer-intensive crops due to soaring fertilizer prices.

FAO Chief Economist Máximo Torero said global agrifood systems have so far shown resilience despite the disruptions linked to the Strait of Hormuz crisis. He noted that cereal prices have risen only moderately because of relatively strong stocks and adequate carryover supplies from previous seasons. However, vegetable oil markets are witnessing sharper increases as higher crude oil prices boost biofuel demand.

Global maize prices increased by 0.7 percent due to tighter seasonal supplies and weather-related concerns in Brazil and parts of the United States. Strong ethanol demand, supported by elevated crude oil prices, further strengthened maize markets. In contrast, sorghum prices declined by 4 percent due to weaker import demand and improved supply prospects among key exporters.

Rice prices also moved upward during April. The FAO All Rice Price Index rose by 1.9 percent, driven mainly by higher prices of Indica and fragrant rice varieties. FAO attributed the increase to rising production and marketing costs following the surge in crude oil and fuel derivative prices across exporting countries.

The sharpest increase among all food categories came from vegetable oils. The FAO Vegetable Oil Price Index jumped 5.9 percent from March, reaching its highest level since July 2022. Prices of palm, soybean, sunflower and rapeseed oils all strengthened during the month. Palm oil prices increased for the fifth consecutive month, supported by stronger biofuel demand, policy incentives in producing nations and concerns over lower production in Southeast Asia.

Meanwhile, the FAO Meat Price Index touched a new record high in April, rising 1.2 percent month-on-month and 6.4 percent compared to a year ago. 

Dairy and sugar prices declined during the month. The FAO Dairy Price Index fell by 1.1 percent due to abundant milk supplies in the European Union and stronger-than-expected output in Oceania. Sugar prices dropped sharply by 4.7 percent from March and were down 21.2 percent from a year ago, reflecting expectations of abundant global supplies, improved production prospects in China and Thailand, and the beginning of Brazil’s new sugar harvest season.