World food price index marks biggest rise since March 2022

Global food prices saw the largest jump in 2.5 years in September, with bad weather and geopolitical risks threatening to keep consumer costs elevated for longer.

An index of food-commodity prices created by the United Nations’ Food and Agriculture Organisation (FAO) rose to the highest level since August 2023, according to data released on Oct 4. The 3 per cent gain in the gauge – that tracks grains, sugar, meat, dairy and vegetable oils costs – is the largest increase since March 2022. 

That month, the index had jumped more than 13 per cent following Russia’s invasion of Ukraine.

While the index tracks raw commodity costs rather than retail prices, the rise could indicate that higher food prices may continue to hit consumers as bad weather in key growers and escalating tensions in the Middle East threaten to roil food markets. 

Although the index has rolled back from a record high witnessed in the wake of the Russian attack, signs of tight supplies and pinch points in global trade routes have fueled a fresh upward push for food prices. 

The largest gains were seen in sugar prices on signs of a worse crop in Brazil and concerns over India’s export abilities. Vegetable oil and grain prices also saw notable hike on signs of smaller supplied of crops such as wheat, palm, sunflowers, and rapeseed. 

The pressure may continue for the markets, with the FAO separately cutting its global grain stockpile forecast from a month ago. BLOOMBERG