World food prices rise to four-year high

World food prices rose to their highest level in almost four years in August. All major food groups became more expensive, with the biggest jump recorded in the sugar market.

New data from the UN Food and Agriculture Organization (FAO) show this.

The FAO Food Price Index stood at 133.3 points in August, up 1.9% from the revised July figure and 2.5% higher than a year ago. This is the highest level since November 2022. At the same time, the index is still 16.8% below the record high reached in March 2022.

As early as July, Kurs Ukraine wrote about a three-year high in world food prices. At that time, FAO initially estimated the index at 131.1 points, but later revised the July figure to 130.8 points. In August, growth accelerated noticeably.

Sugar rose the most

The sugar price index jumped by 11.9% in a month. FAO links this to expectations of lower sugar beet yields in the EU due to unfavourable weather, risks from El Niño for Asian producers, reduced production in Brazil, and India's decision to allow duty-free import of raw sugar.

The grain index increased by 2.2%. World wheat prices added 2.6% over the month and are already 15% above last year's level. The market is pressured by export logistics disruptions in the Black Sea and worsening harvest prospects in Europe due to hot and dry weather.

Maize rose 2.5% on concerns about the harvest in the US and EU, strong demand from ethanol and feed producers, and supply disruptions linked to the situation in the Strait of Hormuz and interruptions in Ukrainian exports.

Vegetable oils became 1.1% more expensive in August, meat – 1%, and dairy products – 2.3%. In the case of dairy products, one of the main factors was the reduction in milk supply in the European Union due to heat and drought.

Grain output to decline after record

FAO at the same time lowered its estimate of world grain production in 2026. It now expects 2.98 billion tonnes – 2% less than last year, though this would still be the second largest harvest in history.

World wheat production is forecast at 810.7 million tonnes, maize – 1.309 billion tonnes. Grain trade in the 2026/27 season, according to the organization, will decrease from record levels to 509.3 million tonnes.

FAO notes that food markets face simultaneous pressures from climate risks, geopolitical tensions and disruptions in trade logistics. However, changes in international quotations do not necessarily immediately reflect in retail prices, since the index tracks precisely global prices for commodities traded internationally.

Based on materials from: FAO