Global food prices climb to highest level since late 2022

Global food prices rose in August to their highest level since late 2022, as extreme weather and trade disruptions increased pressure on supplies of staple crops.

The United Nations Food and Agriculture Organization said its food price index averaged 133.3 points last month, up from a revised 130.8 points in July. The reading was the highest since November 2022, although it remained about 17% below the record reached in March 2022 after Russia’s full-scale invasion of Ukraine.

Agricultural markets faced pressure from sharply higher temperatures and drought across Europe, as well as risks associated with the El Niño climate pattern. Global trade has also been disrupted by the war in Ukraine and tensions involving Iran, affecting the Gulf and Black Sea regions.

Grain prices climbed to their highest level in three years, while sugar reached a one-year high. All of the FAO’s main food commodity indexes rose during August, including those for cereals, vegetable oils, sugar, meat and dairy products.

Maximo Torero, the FAO’s chief economist, said the increase signaled the return of risk premiums to food markets.

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The increase in global food prices in August is a sign that risk premiums are returning to food markets.