Heatwaves Push Global Food Prices to Three-Year High

Global food prices have reached their highest level in three and a half years due to heatwaves, conflicts, and weather phenomena. According to the UN Food and Agriculture Organization (FAO), the index of food commodity prices rose to 131.1 points in July, up from 130.3 in June.

The FAO cited several factors contributing to the price increase: heatwaves affecting wheat yields in key producing countries, persistent hot and dry weather impacting sugar crop yields in the European Union, and damage caused by El Niño. Cereal prices rose by 3.4% month on month in July, with a 5.8% increase in global wheat costs.

Disruptions to Black Sea export flows and damage to export infrastructure after intensified attacks between Russia and Ukraine pushed up prices. The heatwave that swept across Europe in June forced grain farmers to destroy an estimated 9m tonnes of crops. Sugar prices jumped by 5.6% in July, mainly due to weather fears and new rules in Brazil increasing the amount of ethanol added to gasoline.