Global food prices hit over three-year high amid energy shock, FAO says

World food prices rose in April to their highest level in more than three years, driven largely by surging vegetable oil costs linked to the Iran conflict and disruptions affecting global energy flows, according to the United Nations Food and Agriculture Organization (FAO).

The FAO said its Food Price Index climbed for a third consecutive month, reaching an average of 130.7 points in April. This marked a 1.6% increase from March and the highest level since February 2023, Caliber.Az reports via foreign media. 

The agency said vegetable oil prices saw the sharpest gains, rising 5.9% month-on-month to their highest level since mid-2022. The increase was driven by higher prices for soy, sunflower, rapeseed, and palm oil, with the latter also supported by biofuel-related demand.

FAO Chief Economist Máximo Torero said elevated energy prices were feeding into higher costs for vegetable oils, partly due to increased demand for biofuels made from oil-rich crops. He linked the trend to broader energy market disruptions associated with the Iran war and reduced stability in key shipping routes such as the Strait of Hormuz.

Despite these pressures, Torero noted that global food systems have shown resilience. He said cereal prices rose only slightly due to adequate stockpiles from previous harvests.

Cereal prices increased 0.8% month-on-month and were up 0.4% compared to a year earlier, reflecting modest gains in wheat and maize prices amid weather concerns, higher fertilizer costs, and biofuel demand. The FAO also warned that wheat plantings in 2026 could decline as farmers shift toward less fertilizer-intensive crops due to rising input costs.

Meat prices rose 1.2% in April to a record high, driven by limited cattle availability in Brazil. In contrast, sugar prices fell 4.7% due to expectations of strong supply from Brazil, China, and Thailand.

The FAO said global agri-food markets continued to show overall resilience despite geopolitical tensions and energy volatility. In a separate update, the agency slightly raised its forecast for 2025 global cereal production to a record 3.040 billion metric tons, about 6% higher than the previous year.

By Sabina Mammadli