Food Inflation Risk Returns as Wheat and Maize Prices Hit Multi-Year Highs

Global food commodity prices continued their upward trend in September, driven by supply constraints, weather risks, and trade disruptions. The Food and Agriculture Organisation (FAO) of the United Nations reported that the FAO Food Price Index (FPI) averaged 136 points in September, a 1.5% increase from August.

The strongest increase was seen in cereal markets, with the FAO Cereal Price Index rising 17% to 122.8 points compared to last year. World wheat prices reached their highest level since August 2023, up 6% in September, due to logistical constraints in the Black Sea region and dry weather ahead of winter wheat planting in North America.

Maize prices also climbed nearly 6%, reaching a multi-year high. The FAO attributed this increase to lower-than-expected yields in the United States and reduced export availability from Brazil. Trade disruptions in the Black Sea further constrained maize availability, while uncertainty surrounding shipping through the Strait of Hormuz continued to raise concerns over fuel, fertiliser, and freight costs.