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Ulviyya Poladova

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Global food prices have surged to a four-year peak, driven by significant logistics disruptions and adverse weather conditions that have heightened concerns over food supply chains. According to the United Nations Food and Agriculture Organization (FAO), September witnessed a notable rise in food prices, marking the highest levels since late 2022.

The FAO Food Price Index, which tracks the monthly changes in international food prices, increased by approximately 1.5 percent in September, reaching 136 points. This index now stands at its highest since November 2022. Although still about 14.3 percent below the all-time high recorded in March 2022 following the onset of the Russia-Ukraine conflict, it represents a 5.8 percent increase compared to the same period last year.

Maximo Torero, FAO's Chief Economist, highlighted the multifaceted pressures contributing to the rise in food prices. "Disruptions in key regions such as the Strait of Hormuz and the Black Sea, combined with climate shocks, are exerting sustained and increasingly broad-based upward pressure on commodity prices," Torero said. He further warned that these pressures, if they persist, could lead to higher consumer food prices, especially in countries heavily reliant on food and energy imports.

The cereal price index rose by 5.1 percent compared to August. The increase was driven primarily by logistical constraints in the Black Sea region and drought conditions in parts of North America before planting season. Wheat prices increased by 6.3 percent due to these factors, alongside supply concerns in key producing regions. Corn prices were also up by 5.6 percent, supported by worries over crop yields in the United States, export restrictions in Brazil, and uncertainties emanating from the Strait of Hormuz.

The vegetable oil price index increased slightly by 0.9 percent. This rise is attributed mainly to drought conditions in Southeast Asia, which impacted palm oil production, paired with strong global import demand.

In contrast, the meat price index dropped by 1.1 percent, reflecting ample export supplies that led to falling prices for chicken and pork. Beef prices in Brazil rose, buoyed by strong demand from the United States, while lamb prices remained steady.

The dairy price index dipped marginally by 0.1 percent. This small decline was due to decreasing cheese prices offsetting rising milk powder prices, with butter prices holding steady.

The most pronounced surge was seen in sugar prices, which climbed by 6.1 percent in September. This significant increase is linked to forecasts of reduced global supply for the 2026-2027 season. Key factors include lower production projections in Thailand, weak monsoon rains in India, worsening El Niño weather conditions, excessive rainfall in Brazil’s central-southern region, and a decline in sugar beet cultivation across the European Union.

The current surge in global food prices reflects a complex interplay of geopolitical tensions, climate variability, and logistical bottlenecks that threaten the stability of global food systems. The disruptions in critical maritime chokepoints such as the Strait of Hormuz and the Black Sea channel vital exports, particularly from key grain-producing regions. Combined with erratic weather patterns - manifesting as droughts and floods - these factors exert upward pressure on prices by limiting supply and increasing production costs.

Food prices rising at this pace pose a serious threat to vulnerable populations, especially in nations heavily dependent on imports for their food and energy needs. Inflation in food costs translates directly into increased living expenses, pushing many people toward food insecurity and malnutrition. While the 2026 cereal harvest is expected to be one of the largest ever recorded, the downward revision signals a tightening supply outlook. Coupled with rising demand and persistent logistical challenges, this could keep prices elevated or push them higher, limiting the margin for error in global food markets.

The broader energy situation also plays a significant role. Increased energy prices raise costs for fertilizer, transportation, and storage, further amplifying food price inflation. This adds to the pressure on countries already struggling with economic hardships.

Low-income countries remain the most vulnerable, where food costs account for an average of about 36% of consumption, compared with 20% in emerging economies and 9% in developed countries. Rising prices for food and fertilizers create not only economic, but also socio-political consequences, especially with limited budget opportunities. Thus, if high energy and food prices persist, this will lead to global inflation. Historically, the steady rise in oil prices has been accompanied by an increase in inflation and a slowdown in growth. Higher transportation and production costs are reflected in the prices of goods and services.

In Europe and many developing countries, higher yields and widening credit spreads increase the burden on debt servicing and make refinancing more difficult for governments and companies. In sub-Saharan Africa and some countries in the Middle East and South Asia, limited reserves and market access make external financial shocks more dangerous, especially when the cost of importing fuel, fertilizers and food increases.

The countries most at risk are not necessarily those with the highest food prices today, but those with the fewest alternatives when global supplies are disrupted. Building up local production, diversifying suppliers and improving storage and transport capacity may not prevent price increases, but they can make the next global shock easier to absorb.