Global food prices climbed to their highest level in nearly four years in September, according to the United Nations' Food and Agriculture Organization (FAO). The FAO Food Price Index averaged 136.0 points last month, compared with a revised 134.0 points in August. This represents the highest reading since November 2022, marking a significant escalation in global food cost pressures. The index, which tracks monthly changes in international prices for a basket of food commodities, is driven higher by gains in cereals, sugar and vegetable oils, with meat and dairy quotations declining during the month. As reported by Reuters, FAO Chief Economist Maximo Torero explained that the rise reflected a broader increase in commodity prices as disruptions around the Strait of Hormuz and the Black Sea coincided with climate-related shocks.
The price surge was primarily driven by cereals, sugar and vegetable oils, with FAO benchmarks for all three commodities increasing during the month. As reported by Reuters, meat and dairy prices declined during the same period, creating a mixed picture across different food categories. International sugar prices hit an 18-month high due to concerns over a severe El Nino pattern, while wheat futures reached a three-year peak early last month due to war-related disruption to Black Sea trade. The disruptions affecting global food prices include climate shocks, putting pressure on energy, transport and key food commodities. Weather concerns, logistics disruptions and tensions affecting major commodity markets were among the key factors driving the price increases.
Chicago corn rose on Wednesday, trading near last session's one-week high, with the most-active corn contract rising 0.2% to $5.08-3/4 a bushel after hitting its highest since September 30 on Tuesday. Soybeans gained 0.1% at $13.04 a bushel, while wheat was little changed at $7.04-3/4 a bushel after closing higher on Tuesday. The rally was supported by concerns about declining US crop conditions, as reported by Reuters. Grain traders are monitoring Midwest weather forecasts as farmers ramp up harvesting following rain delays last week, with much of the region expected to remain dry over the next week. The US Department of Agriculture on Monday said US farmers had harvested 23% of their corn and 25% of their soybeans as of Sunday, less than expected by analysts and below the average pace over the past five years.
Wheat markets came under significant pressure after a war-related collapse in Black Sea trade drove wheat futures to a three-year peak early last month, according to Reuters. The pressure on food commodities has been linked to wider disruptions affecting transport and logistics, as noted by FAO chief economist Maximo Torero. He explained that the organization is witnessing a persistent and increasingly broad-based build up in global commodity prices, with disruptions in the Strait of Hormuz and the Black Sea combined with climate shocks creating broader pressure on energy, transport and major food commodities. Two merchant ships, including one carrying grain, were hit on Tuesday in a drone strike in the Black Sea off Bulgaria, with another vessel struck on Monday outside Romania's territorial waters in an attack blamed by Ukraine on Russian drones.
FAO Chief Economist Maximo Torero warned that if sustained, these pressures will soon pass through to consumer food prices, particularly in countries that depend heavily on imports of food and energy. The sustained upward pressure on global food commodity prices reflects the complex interplay of multiple factors including climate shocks, geopolitical tensions, and logistical disruptions that continue to affect international food markets. The organization has lowered its 2026/27 world cereal trade forecast by 0.7% due to weaker Black Sea exports, while maintaining its 2026 global cereal production forecast at 2.979 billion metric tons, representing a 2.1% decline from the previous year's peak but still marking the second-largest harvest on record.
