World Food Price Rise Set To Continue If Iran War Lasts, Says FAO

INA

Supermarket shelves.

World food prices climbed in March to their highest ‌level since September last year and could rise further if the Middle East conflict that pushed up energy prices continues, the United Nations Food and Agriculture Organization said on Friday.

"Price rises since the conflict began have been modest, driven mainly by higher oil prices and cushioned by ample global cereal supplies," FAO Chief Economist Maximo Torero said in a statement.
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But if the conflict lasts over 40 days and input costs remain ⁠high, farmers may reduce inputs, plant less, or switch crops to less intensive fertiliser crops, he said.

"Those choices will hit future yields and shape our food supply and commodity prices for the rest of this year and all of the next," he added.

The FAO Food Price Index, which tracks changes in a basket of internationally traded food commodities, rose by 2.4% from its revised February level. It is now 1% higher than a year earlier, although still nearly 20% below its March 2022 peak, reached shortly after the onset of the war in Ukraine.

The cereal price index increased by 1.5% month-on-month, driven by a 4.3% rise in international wheat prices amid deteriorating crop prospects in the United States and expectations of reduced planting in Australia due to higher fertiliser costs.

Global maize prices edged higher as strong global supply offset concerns over input costs, while expectations of increased ethanol demand linked to rising energy prices also provided support.

Rice prices fell by 3.0%, reflecting harvest timing and weaker import demand.

Meanwhile, vegetable oil prices rose by 5.1%, marking a third consecutive monthly increase. Higher prices for palm, soy, sunflower, and rapeseed oil were driven by rising global energy costs and expectations of stronger biofuel demand.Palm oil prices reached their highest level since mid-2022.

Sugar prices rose by 7.2% in March to their highest level since October 2025, as higher crude oil prices fuelled expectations that Brazil, the world’s largest sugar exporter, would divert more sugarcane towards ethanol production.

Meat prices increased by 1.0%, driven by higher pork prices in the European Union and rising beef prices in Brazil, while poultry prices registered a slight decline.

In a separate report, FAO slightly raised its estimate for global cereal production in 2025, forecasting a record 3.036 billion metric tonnes. This represents an increase of 5.8% compared with the previous year.

Source: Reuters



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