
Geopolitical tensions and extreme weather conditions weigh on agricultural yields
AI-generated summary
The FAO monitors global food price indices based on harvests and geopolitical tensions. Climatic phenomena like El Niño directly impact agricultural yields.
Food prices saw a sharp increase in August in a context of high temperatures and geopolitical tensions, including sugar prices at a record level for more than a year, the UN Food and Agriculture Organization (FAO) said on Friday. The FAO Food Price Index rose 1.9% in August month-on-month and 2.5% year-on-year. Much larger increases than in July, where the increase was 0.6% over one month and 1% over one year.
The exceptionally hot summer experienced in Europe led to a drop in yields while in Asia the El Niño phenomenon is threatening production. The price of sugar increases accordingly, in August it increased by 11.9%, reaching its highest level since June 2025. The price of wheat jumped by 15% compared to last year. In particular, “the persistent disruptions of export flows in the Black Sea” linked to the war between Russia and Ukraine. The price of corn is up 2.5% over one month, driven by prospects for lower yields in certain American and European regions, increased fertilizer costs due to the Hormuz blockade and strong demand for agrofuels.
“Climate shocks”
Almost all other indicators, from poultry to rice to palm oil, are also on the rise in August. A notable exception is beef, whose prices have fallen due to increased competition between Australian and Brazilian producers on world markets, after China set import quotas. “Climate shocks, geopolitical tensions and logistical disruptions in trade are combining, reducing supply forecasts,” warns its chief economist, Maximo Torero, in the FAO press release. For this 2026 cereal harvest, the FAO is also revising its production forecasts downwards, to 2,980 million tonnes, down 2% compared to the 2025 record. At this stage, this harvest should however be the 2nd largest ever recorded, adds the organization.
AI outlook — possibilities, not facts
Downward revision of 2026 cereal production forecasts to 2,980 million tonnes.
Likely · Within months

Jon Gray, president of Blackstone, disputes the existence of a speculative bubble in AI, saying that real demand for computing power exceeds supply, limited by regulatory and energy constraints, unlike historical bubbles.
Despite the heatwaves, tourism in France remains dynamic. If the French have slightly reduced their stays, the influx of foreign tourists compensates for this drop. The trend now favors the coast and the spread of holidays in June or September.

Carole Delga announced the submission of a completed takeover offer for the Fiber Excellence factory in Saint-Gaudens, supported by a new investor. She asks Emmanuel Macron for temporary nationalization to obtain four additional months of delay.

American trade policy has changed more than 50 times since January 2025. A year and a half later, the tariffs have not had the effects promised by the White House.

One month after the historic fires in Gironde, Landes and Var, which destroyed 119,000 hectares in France, insurers are planning a record amount of 500 million euros in compensation for 25,000 victims, faced with the slowness of the procedures.

Faced with historic drought and heatwaves, Minister of Agriculture Annie Genevard announced a plan of more than a billion euros to support farmers. An envelope deemed insufficient by the FNSEA and the Peasant Confederation.