Global food prices have hit their highest level in three and a half years, as summer heatwaves and conflict in Ukraine and the Middle East push up crop costs.
The UN Food and Agriculture Organization (FAO) index of food commodity prices rose last month to its highest level since January 2023, after a jump in prices for cereals, sugar and vegetable oil.
The FAO cited heatwaves as a factor hitting wheat yields in several key producing countries, while sugar prices were driven up by fears over “persistent hot and dry weather on crop yields in the European Union” and of damage caused by the rapidly developing El Niño weather system.
The index, which tracks monthly changes in a basket of internationally traded food commodities, rose to 131.1 points in July, up from 130.3 in June.
It showed that cereal prices rose by 3.4% month on month in July, including a 5.8% increase in global wheat costs. Continued disruptions to Black Sea export flows and damage to export infrastructure, after intensified attacks between Russia and Ukraine, pushed up prices.
The deadly heatwave that swept across Europe in June, inflamed by carbon emissions, is estimated to have forced grain farmers to destroy 9m tonnes of crops such as wheat, barley, maize and oats.
Sugar prices jumped by 5.6% in July, which the FAO put down to weather fears and new rules in Brazil increasing the amount of ethanol that can be added to gasoline that led to increased demand from fermenters.
Vegetable oil prices rose 2%, which the report attributed to firm demand from Indonesia’s biodiesel sector and higher crude oil prices.
The Iran war has also been pushing up food prices in recent months, as about a third of fertiliser production travels through the strait of Hormuz.
Meat prices fell by 2.8% in July – the first monthly fall this year – with poultry, pig and beef prices all down. However, high summer temperatures limited pigs’ growth rates, providing some price support, the FAO said.
Dairy prices slipped by 0.7%, pushed down by lower quotations for butter and milk powders.
Increased food commodity prices tend to translate into higher prices on the shelves in future months, as suppliers pass on their costs to consumers.
The situation is particularly serious for people in acute food insecurity; the UN’s World Food Programme warned this week that 50 million people are likely to be pushed into acute hunger before the end of next year by the El Niño weather phenomenon.
