Key points
- Global food commodity prices increased in April for the third consecutive month, driven largely by rising vegetable oil prices and energy-related disruptions.
- Wheat, maize, rice and meat prices recorded increases, while dairy and sugar prices declined amid stronger global supplies.
- FAO warned that disruptions linked to the Strait of Hormuz and rising fertiliser costs could threaten future agricultural production despite currently adequate cereal supplies.
Main story
Global food prices continued their upward trend in April, with the Food and Agriculture Organization of the United Nations reporting a third consecutive monthly increase in its benchmark Food Price Index, largely fuelled by surging vegetable oil prices and mounting geopolitical and energy-related pressures.
According to the latest FAO Food Price Index release, the benchmark averaged 130.7 points in April, representing a 1.6 per cent increase from March and a 2.0 per cent rise compared to the same period last year.
The rise was attributed mainly to higher prices for vegetable oils, cereals and meat products, while sugar and dairy prices declined.
FAO said the ongoing crisis surrounding the effective closure of the Strait of Hormuz continued to disrupt fertiliser supplies and elevate global energy costs, increasing production expenses across several agricultural commodities.
The FAO Cereal Price Index rose by 0.8 per cent month-on-month and was 0.4 per cent higher than a year earlier. Wheat prices increased due to drought concerns in parts of the United States and expectations of below-average rainfall in Australia.
Additional pressure on wheat markets stemmed from projections of reduced wheat cultivation in 2026 as farmers increasingly shift to crops requiring less fertiliser amid soaring fertiliser prices.
Global maize prices also increased by 0.7 per cent due to tighter seasonal supplies, weather concerns in Brazil and dry planting conditions in parts of the United States. Strong ethanol demand linked to higher crude oil prices further supported the increase.
Rice prices rose by 1.9 per cent, driven by increased production and transportation costs in major exporting countries following the rise in crude oil prices.
The FAO Vegetable Oil Price Index recorded the sharpest increase among all categories, rising by 5.9 per cent from March to its highest level since July 2022.
Palm oil prices climbed for the fifth consecutive month, supported by stronger biofuel demand, policy incentives in producing nations and concerns over declining production prospects in Southeast Asia. Soybean, sunflower and rapeseed oil prices also increased.
Meanwhile, the FAO Meat Price Index reached a record high after rising by 1.2 per cent from March and 6.4 per cent year-on-year. Beef prices surged due to limited cattle supplies in Brazil, while pig meat prices increased in the European Union amid stronger seasonal demand.
In contrast, dairy prices declined by 1.1 per cent due to abundant milk supplies in the European Union and improved production levels in Oceania.
Sugar prices recorded the steepest decline, falling by 4.7 per cent from March and 21.2 per cent compared to last year, amid expectations of ample global supplies from major producers including Brazil, China and Thailand.
The issues
The latest FAO report underscores growing concerns over the impact of geopolitical tensions and energy market volatility on global food systems.
The disruption of fertiliser supplies through the Strait of Hormuz has significantly increased the prices of urea and phosphate, raising fears over fertiliser affordability and future agricultural productivity.
Although global cereal supplies remain relatively strong, FAO warned that prolonged supply chain disruptions and elevated production costs could pose risks to food security, particularly in import-dependent economies.
The organisation also revised its forecast for global cereal production upward, projecting total output at 3.04 billion tonnes in 2025/26, representing a six per cent increase over the previous year.
However, FAO slightly lowered its 2026 world wheat production forecast to 817 million tonnes, citing uncertainties tied to high input costs and market instability.
What’s being said
FAO Chief Economist Máximo Torero said despite ongoing disruptions, global agricultural systems had demonstrated resilience.
“Despite the disruptions linked to the crisis in the Strait of Hormuz, global agrifood systems continue to show resilience. Cereal prices have increased only moderately so far, supported by relatively strong stocks and adequate supplies from previous seasons,” he said.
Torero added that vegetable oil markets were experiencing stronger price increases due to higher oil prices boosting global demand for biofuels.
What’s next
FAO and the Agricultural Market Information System are expected to continue monitoring developments in global fertiliser markets, energy prices and agricultural production patterns.
Analysts say attention will remain focused on the geopolitical situation around the Strait of Hormuz, weather conditions in major grain-producing regions and the affordability of farm inputs ahead of the next planting seasons.
Further volatility in oil and fertiliser markets could influence global food inflation and agricultural output in the coming months.
Bottom line
While global food supplies remain generally stable, rising energy costs, geopolitical disruptions and increasing fertiliser prices are placing renewed pressure on international food markets. Vegetable oils and cereals are already showing signs of strain, raising concerns that prolonged instability could eventually affect global food affordability and food security.
