The ongoing Iran war and the trade disruption at the Strait of Hormuz have shot up the global food prices to their highest level in over three years, with vegetable oil registering a sharp rise in April itself.
As per the United Nations Food and Agriculture Organization (FAO) chief economist Maximo Torero, vegetable oil prices are being driven by elevated energy costs that are in turn raising demand for biofuels made using organic materials, like oil-rich plants. However, the geopolitical disruptions have not affected the overall resilience of the agri-food systems; as compared to vegetable oil, cereal prices showed a moderate increase due to the adequate supplies from previous seasons.
The FAO Food Price Index, which measures changes in a basket of globally traded food commodities, rose for a third consecutive month in April to average 130.7 points, up 1.6% from its revised March level and the highest since February 2023. The last such phenomenon was seen in March 2022, when the index hit a peak of 160.2, immediately after the start of the Ukraine war.
Talking about the spike in the vegetable oil price, the FAO’s April index rose 5.9% month-on-month to its highest since July 2022 as a result of the increased value of soy, sunflower, rapeseed oil and palm oil.
“By contrast, April cereal prices rose just 0.8% from March and were up 0.4% from a year ago, reflecting modestly higher prices for the likes of wheat and maize linked to weather concerns, rising fertiliser costs and increased biofuels demand. There are expectations for reduced 2026 wheat plantings,” the FAO said, while noting the shift among farmers to less fertiliser-intensive crops, given prices for the inputs have surged.
On the other hand, the FAO Meat Price Index reached a new record high in April, rising by 1.2% from March and 6.4% from a year ago. The Dairy Price Index, on the other hand, declined by 1.1% from March, mainly reflecting lower international quotations for butter and cheese amid abundant milk supplies in the European Union and stronger-than-expected late-season output in Oceania.
“Elsewhere, April meat prices rose 1.2% month-on-month to a record high amid limited slaughter-ready cattle in Brazil, while sugar dropped 4.7% thanks to forecasts for ample supply in Brazil, China and Thailand,” the FAO remarked further.
In a separate report, the UN agency has slightly raised its 2025 global cereal production estimate to a record 3.040 billion metric tonnes, 6% above levels seen in the prior year.