International food costs surged to their highest levels in more than three years last month, according to a Friday report from the United Nations Food and Agriculture Organization. The spike was largely attributed to escalating vegetable oil prices amid Middle East warfare and the virtual shutdown of the Strait of Hormuz shipping route.
Máximo Torero, the FAO’s Chief Economist, explained that rising energy expenses are pushing vegetable oil costs higher by increasing demand for biofuels produced from organic sources like oil-rich crops.
Despite conflict-related supply chain interruptions, Torero noted that agricultural food networks have demonstrated remarkable stability. Grain costs have seen only modest increases due to sufficient stockpiles from earlier harvests.
The organization’s Food Price Index, which tracks price movements in internationally traded food products, increased for three consecutive months in April, reaching an average of 130.7 points. This represented a 1.6% jump from March’s adjusted figure and marked the highest reading since February 2023.
The index previously peaked at 160.2 points in March 2022 following the outbreak of the Ukraine conflict.
Vegetable oil prices in the FAO’s April assessment jumped 5.9% compared to the previous month, hitting their highest mark since July 2022. The increase reflected higher costs for soy, sunflower, rapeseed, and palm oils, with palm oil particularly affected by biofuel policy incentives.
Meanwhile, cereal prices showed much smaller gains, rising just 0.8% from March and 0.4% compared to April of the previous year. The modest increases in wheat and corn prices were linked to weather-related concerns, higher fertilizer costs, and growing biofuel consumption.
The UN organization anticipates reduced wheat planting for the 2026 season as farmers consider switching to crops requiring less fertilizer due to dramatically increased input costs.
April meat prices climbed 1.2% month-over-month to reach record levels, driven by limited availability of cattle ready for slaughter in Brazil. Sugar prices, however, declined 4.7% based on projections of abundant supplies from Brazil, China, and Thailand.
In a companion report, the FAO marginally increased its projection for 2025 worldwide cereal production to a record 3.040 billion metric tons, representing a 6% increase over the previous year’s output.
