Global food costs surged to their peak level since September of last year during March, and the United Nations Food and Agriculture Organization warned Friday that ongoing Middle East tensions could push prices even higher.
The UN agency’s Chief Economist Maximo Torero noted that increases have remained relatively moderate so far, stating: “Price rises since the conflict began have been modest, driven mainly by higher oil prices and cushioned by ample global cereal supplies.”
However, Torero cautioned that prolonged conflict lasting more than 40 days with sustained high input costs could force farmers to make difficult decisions, including cutting back on fertilizer use, reducing planted acreage, or switching to crops requiring less intensive cultivation.
“Those choices will hit future yields and shape our food supply and commodity prices for the rest of this year and all of the next,” Torero explained.
The organization’s Food Price Index, which tracks price movements in a collection of internationally traded food products, jumped 2.4% compared to February’s adjusted figures. Current levels sit 1% higher than the same period last year, though they remain nearly 20% below the March 2022 surge that followed Russia’s invasion of Ukraine.
Grain costs specifically increased 1.5% month-over-month, with wheat prices leading the charge with a 4.3% spike. This rise stems from deteriorating crop conditions in the United States and anticipated reduced planting in Australia due to expensive fertilizer.
Corn prices saw modest gains as abundant worldwide supplies helped counteract fertilizer cost worries, while increased ethanol demand linked to higher energy costs provided additional support.
Rice bucked the trend, dropping 3.0% as harvest timing and weaker purchasing demand from importing nations took effect.
Vegetable oil costs climbed 5.1%, marking the third straight month of increases. Palm, soybean, sunflower, and rapeseed oils all posted higher prices, reflecting elevated global energy costs and stronger anticipated biofuel demand. Palm oil specifically hit its highest price point since mid-2022.
Sugar experienced the steepest jump at 7.2% in March, reaching levels not seen since October 2025. Rising crude oil costs sparked expectations that Brazil, the world’s top sugar producer, would redirect more sugarcane toward ethanol production.
Meat prices edged up 1.0% overall, driven by increased pork costs in the European Union and higher beef prices in Brazil, though poultry prices declined slightly.
In related findings, the FAO marginally increased its projection for worldwide grain production in 2025 to a record 3.036 billion metric tons, representing a 5.8% year-over-year increase.
