Biofuels, Weather, and Geopolitics Disrupt Global Food Markets

Global food markets are being increasingly influenced by factors beyond traditional supply and demand dynamics. According to S&P Global, changes in food prices are becoming more difficult to explain solely by production and consumption balances.

The FAO Food Price Index rose 2% from July to 233 points in August 2026, with the vegetable oil price index increasing to 196 points, reaching a multi-year high.

Biofuels are becoming an important additional source of demand, having already become the third major component of agricultural commodity use after food and feed consumption. Expanding ethanol production in the US and Brazil is supporting demand for corn and sugar, while biodiesel policies in Southeast Asia are increasing the use of vegetable oils.

This reduces the amount of feedstock available for export and intensifies competition between the food, feed, and energy sectors.