Global food prices hit 3-year high as heatwaves, conflicts disrupt supplies
World food inflation climbs to highest level since 2023, says UN
Global food prices have climbed to their highest level in more than three years as extreme weather, armed conflicts and supply chain disruptions continue to affect agricultural production and international trade, according to the UN Food and Agriculture Organization (FAO).
The FAO’s Food Price Index rose to 131.1 points in July, up from 130.3 in June, marking its highest level since January 2023. The increase was mainly driven by rising prices of cereals, sugar and vegetable oils.
Heatwaves Reduce Crop Production
The FAO said prolonged heatwaves have reduced wheat yields in several major producing countries, while persistent hot and dry weather in Europe and the strengthening El Niño weather pattern have raised concerns about sugar production.
Global wheat prices increased 5.8 percent during July, while cereal prices overall rose 3.4 percent. The agency also reported a 3.6 percent increase in maize prices due to hot and dry conditions affecting parts of the United States’ Corn Belt.
Europe’s record-breaking heatwave earlier this summer is estimated to have destroyed around 9 million tonnes of grain crops, including wheat, barley, maize and oats.
Conflicts Add Pressure
The ongoing conflict between Russia and Ukraine has further disrupted grain exports through the Black Sea, damaging export infrastructure and tightening global supplies.
Meanwhile, tensions involving Iran have also contributed to rising agricultural costs, as about one-third of the world’s fertilizer shipments pass through the Strait of Hormuz, a critical global shipping route.
Sugar and Vegetable Oil Prices Rise
Sugar prices increased 5.6 percent in July, driven by weather-related production concerns in Europe and Brazil’s decision to increase ethanol blending in gasoline, boosting demand for sugar used in ethanol production.
Vegetable oil prices rose 2 percent, supported by stronger biodiesel demand in Indonesia and higher global crude oil prices.
Meat and Dairy Prices Ease
Not all food categories recorded increases.
Meat prices declined 2.8 percent in July—the first monthly drop this year—as poultry, beef and pork prices fell. However, the FAO noted that high summer temperatures slowed pig growth, limiting the decline.
Dairy prices slipped 0.7 percent, mainly due to lower butter and milk powder prices, although cheese prices recorded their first monthly increase in a year.
Hunger Risks Increase
The UN World Food Program (WFP) has warned that the strengthening El Niño weather phenomenon could push 50 million more people into acute hunger before the end of next year.
The agency said Central and South America, the Caribbean and southern Africa are expected to be among the regions most severely affected. Meteorologists believe the current El Niño could become the strongest experienced in at least 70 years.
Farmers across Europe have also warned that continuing heatwaves, drought and wildfires are reducing crop yields and are likely to push food prices even higher in the coming months.
As international commodity prices continue to rise, consumers worldwide are expected to face higher food prices as increased production and transportation costs gradually filter through to supermarket shelves.
