Global food prices climbed to their highest level in more than three years in April as escalating geopolitical tensions in the Middle East, rising energy costs and disruptions linked to the effective closure of the Strait of Hormuz intensified pressure across international commodity markets, according to the latest data released by the Food and Agriculture Organization (FAO) of the United Nations.
The highest increases were recorded in vegetable oil markets, where prices rose amid growing demand for biofuels and mounting fears over supply disruptions tied to the Iran conflict and instability in one of the world’s most critical energy transit corridors.
The FAO Food Price Index, which tracks monthly changes in a basket of globally traded food commodities, rose for a third consecutive month in April to average 130.7 points, representing a 1.6 percent increase from its revised March level and marking its highest reading since February 2023.
Although the latest figure remains below the record 160.2 points reached in March 2022 following the outbreak of the Russia-Ukraine war, analysts say the renewed upward momentum signals growing vulnerabilities within global food supply chains as geopolitical risks increasingly spill into agricultural markets.
According to Máximo Torero, elevated energy costs resulting from tensions around the Strait of Hormuz are now feeding directly into agricultural commodity inflation, particularly through the biofuels market.
“Despite the disruptions linked to the crisis in the Strait of Hormuz, global agrifood systems continue to show resilience. Cereal prices have increased only moderately so far, supported by relatively strong stocks and adequate supplies from previous seasons. Vegetable oils, however, are experiencing stronger price increases, driven largely by higher oil prices, which are increasing demand for biofuels and putting additional pressure on vegetable oil markets,” Torero said.
The Strait of Hormuz remains one of the world’s most strategically important shipping routes, handling a significant portion of global crude oil exports. Market disruptions linked to the conflict have heightened concerns over energy availability, transportation costs and fertiliser prices, all of which directly affect global agricultural production.
The FAO Vegetable Oil Price Index jumped 5.9 percent month-on-month in April, reaching its highest level since July 2022. Prices rose across all major vegetable oils, including palm, soy, sunflower and rapeseed oils.
Palm oil prices increased for the fifth consecutive month, supported by stronger anticipated demand from the biofuel sector amid policy incentives in several producing countries and persistently high crude oil prices. Additional pressure emerged from concerns over weaker production prospects in Southeast Asia, one of the world’s leading palm oil producing regions.
Analysts note that the relationship between crude oil and agricultural commodities has become increasingly interconnected as governments and industries accelerate the use of renewable energy alternatives, including ethanol and biodiesel derived from crops and vegetable oils.
The FAO said higher crude oil prices also contributed to rising demand for ethanol, further lifting maize prices and adding fresh inflationary pressure to global feed and food markets.
Global maize prices rose 0.7 percent during the month, driven by tightening seasonal supplies and weather-related concerns in Brazil, alongside dry planting conditions in parts of the United States.
The cereal market, however, showed greater resilience compared to vegetable oils despite mounting geopolitical uncertainties.
The FAO Cereal Price Index rose only 0.8 percent from March and remained just 0.4 percent above year-earlier levels, supported by relatively strong global inventories and adequate carryover supplies from previous harvest seasons.
Still, pressure points are beginning to emerge within wheat markets.
World wheat prices increased by 0.8 percent in April amid drought concerns in parts of the United States and expectations of below-average rainfall in Australia, two major wheat-producing regions.
The UN agency also warned that elevated fertilizer prices linked to rising energy costs and shipping disruptions could discourage wheat cultivation in the coming planting season.
According to the FAO, farmers are increasingly expected to shift toward less fertilizer-intensive crops as input costs continue rising.
The organisation revised down its forecast for 2026 global wheat production to 817 million tonnes, representing an estimated decline of around 2 percent from the previous year, although output is still projected to remain above the five-year average.
“The outlook continues to face uncertainty amid the effective closure of the Strait of Hormuz, which has raised input costs – notably for energy and fertilizers – alongside relatively softer wheat prices,” the agency stated.
Rice prices also moved higher during the month.
The FAO All Rice Price Index rose by 1.9 percent, driven largely by stronger Indica and fragrant rice quotations. Increased production and marketing costs across exporting countries, following higher crude oil and fuel derivative prices, contributed to the increase.
Meanwhile, meat prices climbed to a new record high in April.
The FAO Meat Price Index increased by 1.2 percent month-on-month and stood 6.4 percent above levels recorded a year earlier.
Global bovine meat prices reached fresh peaks, particularly due to limited slaughter-ready cattle supplies in Brazil amid ongoing herd rebuilding efforts. Pig meat prices also rose in the European Union as seasonal demand strengthened.
In contrast, dairy and sugar prices declined during the month.
The FAO Dairy Price Index fell by 1.1 percent, reflecting lower international prices for butter and cheese amid abundant milk supplies within the European Union and stronger-than-expected production levels in Oceania.
Sugar prices recorded the heaviest decline among major food categories.
The FAO Sugar Price Index dropped by 4.7 percent from March and remained more than 21 percent below year-earlier levels, largely due to expectations of abundant global supply.
Improved production prospects in China and Thailand, alongside the commencement of Brazil’s new sugar harvest season, contributed significantly to downward price pressure.
Despite mounting geopolitical uncertainties and commodity market volatility, the FAO raised its forecast for 2025 global cereal production, strengthening expectations of a relatively favourable supply outlook for the 2025/26 season.
Global cereal output is now projected to reach a record 3.040 billion metric tonnes, representing a 6 percent increase compared to the previous year.
The upward revision reflects improved expectations for several major cereal crops and reinforces confidence that global inventories may continue cushioning food markets against price shocks in the near term.
Nevertheless, economists warn that prolonged instability around the Strait of Hormuz could sustain upward pressure on agricultural input costs, energy markets and transportation expenses, potentially complicating food inflation trends globally.
