Global Food Prices Hit Near Four-Year High in September
Global food prices surged to near a four-year high in September, driven by shipping disruptions and adverse weather conditions, according to the Food and Agriculture Organisation of the United Nations (FAO). The FAO Food Price Index averaged 136.0 points in September, marking a 1.5% increase from August and a 5.8% rise compared to the same month last year. This is the highest reading since November 2022.
The increase was primarily fueled by higher cereal and sugar prices. The Cereal Price Index climbed 5.1% from August and 17.2% year-over-year. Wheat prices rose 6.3% due to logistical constraints in the Black Sea region and dry weather in North America. Maize prices increased 5.6% amid concerns over U.S. yields, reduced Brazilian exports, and Black Sea trade disruptions. The All Rice Price Index added 1.4% due to weather concerns and seasonally tighter supplies.
The Sugar Price Index rose 6.1% in September on expectations of tighter supplies in 2026/27. Factors contributing to the gain included lower production forecasts in Thailand, below-normal rainfall in India, heavy rains in Brazil’s Centre-South region, and a decline in sugar beet area in the European Union. Strengthening El Niño conditions also added uncertainty.
The Vegetable Oil Price Index increased 0.9%, driven by higher palm oil prices due to strong import demand and concerns over dry weather affecting production in Southeast Asia. However, not all prices rose. The Meat Price Index declined 1.1% as pig and poultry prices fell on abundant exportable supplies, while the Dairy Price Index dipped 0.1% due to lower cheese prices.
FAO also warned that global cereal production in 2026 is forecast to decline 2.1% to 2.979 billion tonnes, though still the second-largest harvest on record. World cereal trade is expected to fall 3.5% to 505.8 million tonnes due to constrained Black Sea shipping routes. Elevated freight rates, firmer fertilizer markets, and continued logistical disruptions are contributing to a more uncertain market environment.