Global Food Prices Hit Three-Year High Amid Supply Risks
Global food prices have reached their highest level since late 2022 due to supply risks mounting across the globe, according to the United Nations' Food and Agriculture Organization (FAO). The FAO's Food Price Index averaged 133.3 points in August, up from July's revised reading of 130.8, marking a nearly 17% decrease from its record peak in March 2022.
The index tracks monthly changes in a basket of internationally traded food commodities. FAO Chief Economist Maximo Torero warned that the increase is a sign that the risk premium is returning to food markets, driven by climate shocks, geopolitical tensions, and disrupted trade logistics.
Extreme heat and drought in Europe have affected maize (corn) and sugar beet harvests as well as livestock output. The anticipated El Nino phenomenon has fueled concerns for palm oil and sugar output in Asia.