FAO Food Price Index Rises 1.9% in August, Reaches Highest Level Since November 2022

According to the statement made by the Food and Agriculture Organization of the United Nations (FAO), the FAO Food Price Index, which monitors monthly changes in international prices of food products, increased by 1.9 percent compared to the previous month in August, reaching 133.3 points.

Thus, the index reached the highest level recorded since November 2022. The index continued to remain approximately 17 percent below the historical record set in March 2022, after the start of the Russia-Ukraine War.

The index increased by 2.5 percent compared to the same period last year.

Adverse weather conditions, conflicts in the Middle East and logistical disruptions in the Black Sea were the main reasons behind the price increases in basic food commodities.

FAO Chief Economist Maximo Torero said in his statement, "The increase in global food prices in August is a serious warning that the risk premium has returned to food markets. Climate shocks, geopolitical tensions and disrupted trade logistics come together to narrow supply expectations." made his assessment.

Extreme heat in Europe negatively affected animal production as well as corn and sugar beet harvests.

The risks posed by El Niño on rice, palm oil and sugar production, especially concentrated in Asia, have increased concerns. On the other hand, the escalating conflicts in the Black Sea restricted grain shipments in the Russia-Ukraine War, which lasted 4.5 years, while the US-Iran tension continued to complicate the global fertilizer flow.

In August, all of FAO's grain, vegetable oils, sugar, meat and dairy products sub-indices increased.

FAO Grain Price Index increased by 2.2 percent compared to July. Logistics problems in the Black Sea increased wheat prices by 2.6 percent. Corn prices increased by 2.5 percent due to drought in the USA and EU and input supply concerns from the Strait of Hormuz.

While the FAO Vegetable Oil Price Index increased by 1.1 percent due to concerns about palm oil production in Southeast Asia, the expectation of abundant supply in canola and sunflower oil limited the rise.

FAO Meat Price Index increased by 1.0 percent due to the impact of pork prices due to hot weather in the EU. As for beef, the competition between exporters due to the quota limit in the Chinese market has suppressed prices.

FAO Sugar Price Index increased by 11.9 percent in August. This sharp rise was associated with expectations that sugar beet yields would decrease in the European Union due to adverse weather conditions, concerns about the impact of El Niño on the expectations of major producing countries in Asia, the decrease in sugar production in Brazil, and India's announcement that it would apply customs duty exemption on raw sugar imports.

FAO Dairy Products Index increased by 2.3 percent compared to July. Most of the increase was due to hot and dry weather conditions leading to a contraction in milk supply in the European Union.

FAO cuts global grain production forecast

FAO also published the Grain Supply and Demand Summary Report, which includes evaluations and forecasts on global production, consumption, trade and stock trends.

FAO reduced its 2026 global grain production forecast to 2 billion 980 million metric tons, decreasing by 3.4 million tons compared to the previous month. Although this estimate is 2 percent below the 2025 harvest, it still remains the second largest harvest in history.