Enviro News Asia, Rome — The Food and Agriculture Organization (FAO) reported that global food commodity prices increased for the second consecutive month in March, driven largely by rising energy costs linked to escalating tensions in the Near East.
According to the FAO Food Price Index, which tracks monthly changes in international prices of key food commodities, the index averaged 128.5 points in March. This marks a 2.4 percent increase from February and a 1.0 percent rise compared to the same period last year.
FAO stated that higher energy prices have influenced multiple commodity markets, particularly through increased production and transportation costs, as well as growing demand for biofuels.
The FAO Cereal Price Index rose by 1.5 percent, led by a 4.3 percent increase in global wheat prices due to drought concerns in the United States and reduced planting expectations in Australia. Maize prices remained relatively stable, supported by adequate global supply, while rice prices declined by 3.0 percent due to weaker demand and currency fluctuations.
FAO Chief Economist Máximo Torero said that although current price increases remain moderate, prolonged conflict and high input costs could significantly impact agricultural production decisions.
“If high costs persist, farmers may reduce input use, scale down planting, or shift to less input-intensive crops, which will ultimately affect yields and global food supply,” he said.
The FAO Vegetable Oil Price Index recorded a notable increase of 5.1 percent, reaching 13.2 percent above its level a year earlier. Prices for palm, soybean, sunflower, and rapeseed oil all rose, reflecting stronger demand linked to biofuel production amid higher crude oil prices.
Meanwhile, the FAO Meat Price Index increased by 1.0 percent, driven by higher pork prices in the European Union and rising beef prices in Brazil. Poultry and ovine meat prices declined due to logistical constraints affecting access to markets in the Near East.
The FAO Dairy Price Index rose by 1.2 percent, supported by higher milk powder prices amid seasonal supply constraints in Oceania. In contrast, cheese prices declined in the European Union due to increased production and weaker export demand.
The FAO Sugar Price Index recorded the highest increase among all categories, rising by 7.2 percent. The surge was driven by expectations that Brazil would allocate more sugarcane for ethanol production as global oil prices rise.
FAO also updated its global production outlook, forecasting wheat production in 2026 at 820 million tonnes, a 1.7 percent decline from the previous year, although still above the five-year average. Lower output is expected in the European Union, the Russian Federation, and the United States, while India is projected to achieve record production.
Global cereal production in 2025 is estimated to reach 3.036 billion tonnes, up 5.8 percent year-on-year, with rice output expected to hit a record 563.3 million tonnes.
FAO noted that global cereal stocks are projected to increase by 9.2 percent, maintaining a stocks-to-use ratio of 32.2 percent, indicating a relatively comfortable supply situation despite ongoing uncertainties.
The Agricultural Market Information System, hosted by FAO, warned that disruptions such as the closure of the Strait of Hormuz could further impact global food systems by increasing energy, fertilizer, and transportation costs.
FAO emphasized that while current supply conditions remain stable, prolonged geopolitical tensions could create significant risks for global food security in the coming months. (*)
