Global food prices climbed in March to their highest level since September of last year, with further increases possible if the ongoing Middle East conflict, which has driven up energy costs, persists. The United Nations Food and Agriculture Organisation (FAO) highlighted this trend on Friday.
FAO Chief Economist Maximo Torero noted that price increases since the conflict began have been relatively moderate, primarily influenced by rising oil prices and mitigated by abundant global cereal stocks. However, he cautioned that if the conflict extends beyond 40 days and input expenses remain elevated, farmers might cut back on inputs, reduce planting areas, or switch to crops requiring less fertilizer. Such decisions could negatively impact future yields, affecting food supply and commodity prices throughout this year and into the next.
The FAO Food Price Index, which tracks changes in a basket of internationally traded food commodities, rose by 2.4% compared to its revised February figure. It stands 1% higher than its value a year ago, though still nearly 20% below the peak reached in March 2022 following the outbreak of the war in Ukraine.
The cereal price index increased by 1.5% month-on-month, driven by a 4.3% rise in international wheat prices. This was attributed to deteriorating crop prospects in the United States and anticipated reductions in plantings in Australia due to higher fertilizer costs. Meanwhile, global maize prices edged upward as ample supplies offset concerns about fertilizer expenses, supported indirectly by increased ethanol demand linked to higher energy prices. Rice prices declined by 3.0%, influenced by harvest timing and weaker import demand.
Vegetable oil prices rose 5.1%, marking the third consecutive monthly increase. Price gains for palm, soy, sunflower, and rapeseed oils reflected the impact of rising global energy costs and expectations of stronger biofuel demand. Notably, palm oil prices reached their highest levels since mid-2022.
Sugar prices surged 7.2% in March to their highest point since October 2025, driven by rising crude oil prices and expectations that Brazil, the world’s largest sugar exporter, would divert more sugarcane towards ethanol production. Meat prices increased by 1.0%, led by higher pig meat prices in the European Union and bovine meat prices in Brazil, while poultry prices experienced a slight decline.
In a related update, the FAO modestly raised its forecast for global cereal production in 2025 to a record 3.036 billion metric tons, representing a 5.8% increase compared to the previous year.
