Global Food Prices Rise as Weather and Shipping Disruptions Persist
The global cost of food commodities rose in September due to weather disruptions and shipping challenges, according to the Food and Agriculture Organization of the United Nations (FAO). The FAO Food Price Index averaged 136.0 points in September, a 1.5% increase from August and 5.8% higher than the same period last year. FAO chief economist Maximo Torero noted that disruptions in key shipping routes like the Strait of Hormuz and the Black Sea, combined with climate shocks, are putting pressure on energy, transport, and food supplies.
Cereal prices saw the most significant increase, rising 5.1% from August and 17.2% compared to September 2025. Wheat prices surged 6.3% due to logistical constraints in the Black Sea region and dry conditions in North America. Maize prices increased 5.6% amid concerns about US yields, reduced exports from Brazil, and shipping disruptions through the Strait of Hormuz. The all rice price index rose 1.4%, driven by higher Indica quotations and weather-related supply tightness.
Sugar prices climbed 6.1% as global supplies are expected to tighten during the 2026/27 season. Factors contributing to this include lower production forecasts in Thailand, poor rainfall in India, and heavy rain in Brazil's Centre-South growing region. Vegetable oil prices increased 0.9%, supported by strong global demand and dry weather concerns in Southeast Asia. In contrast, meat prices fell 1.1% due to abundant export supplies, while dairy prices dropped 0.1%.
Despite the price pressures, FAO's latest outlook does not predict a global cereal production collapse. World cereal production in 2026 is forecast at 2.979 billion tonnes, down 2.1% from 2025 but still the second-largest harvest on record. However, global cereal trade is expected to fall 3.5% from the record 2025/26 level due to constrained shipping routes and limited alternative transport capacity. The strengthening El Niño adds further uncertainty, particularly for rice production in South and Southeast Asia.