Global food commodity prices continued their upward climb in April, as rising energy costs and disruptions linked to tensions in the Near East pushed international markets higher, according to the latest report released by the Food and Agriculture Organization of the United Nations (FAO).

The FAO Food Price Index, which tracks monthly changes in the prices of globally traded food commodities, averaged 130.7 points in April. The figure marked a 1.6 percent increase compared to March and stood 2 percent higher than the same period last year.

Energy Crisis and Hormuz Tensions Push Food Markets Higher

FAO attributed much of the recent pressure on global food prices to elevated energy costs and disruptions associated with the effective closure of the Strait of Hormuz, a vital global trade corridor. The situation has sharply increased fertilizer and transportation costs, creating new risks for agricultural production worldwide.

The organization warned that soaring energy prices are beginning to affect planting decisions, particularly among wheat producers facing high fertilizer expenses. Farmers in several regions are reportedly shifting toward less fertilizer-intensive crops, raising concerns over future wheat supplies.

Wheat, Rice and Vegetable Oil Prices Climb

The FAO Cereal Price Index rose by 0.8 percent in April compared to the previous month. Global wheat prices increased due to drought concerns in parts of the United States and fears of below-average rainfall in Australia.

Maize prices also climbed amid tighter seasonal supplies and unfavorable weather conditions in Brazil and the United States. Strong demand for ethanol, fueled by rising crude oil prices, added further upward pressure.

Rice prices recorded a notable 1.9 percent increase, driven by higher production and marketing costs across major exporting countries following the surge in oil prices.

One of the sharpest increases came in vegetable oils. The FAO Vegetable Oil Price Index jumped 5.9 percent in April, reaching its highest level since July 2022. Palm oil prices rose for a fifth consecutive month as stronger demand from the biofuel sector combined with concerns over weaker production prospects in Southeast Asia.

FAO Chief Economist Máximo Torero stated that despite the disruptions caused by the Hormuz crisis, global agrifood systems have so far shown resilience thanks to strong existing cereal stocks and adequate supplies from previous seasons.

However, he warned that vegetable oil markets are facing mounting pressure as high crude oil prices increase demand for biofuels, tightening global supplies.

Meat Prices Reach Record High

The FAO Meat Price Index reached a new all-time high in April, rising 1.2 percent from March and 6.4 percent year-on-year.

Beef prices surged to record levels, particularly due to limited cattle supplies in Brazil as herd rebuilding efforts continue. Pig meat prices also increased, especially in the European Union where seasonal demand strengthened market activity.

Sugar and Dairy Prices Decline

Not all commodities followed the upward trend.

The FAO Sugar Price Index fell by 4.7 percent in April and was down more than 21 percent compared to last year. The decline was mainly linked to expectations of ample global supplies, particularly from China, Thailand and Brazil.

Meanwhile, dairy prices dropped by 1.1 percent due to abundant milk supplies in the European Union and stronger-than-expected production in Oceania.

FAO Raises Global Cereal Production Forecast

Despite mounting geopolitical and energy-related risks, FAO raised its forecast for global cereal production in 2025.

The organization now expects world cereal production to reach 3.04 billion tonnes, representing a 6 percent increase compared to the previous year and signaling a generally favorable supply outlook for the 2025/26 season.

However, FAO slightly lowered its 2026 global wheat production forecast to 817 million tonnes, citing uncertainties tied to rising input costs and ongoing disruptions in fertilizer markets caused by the Hormuz crisis.

Fertilizer Costs Raise New Concerns

The Agricultural Market Information System (AMIS), which is hosted by FAO, also warned that the continuing disruptions around the Strait of Hormuz are severely affecting fertilizer markets.

According to the latest AMIS Market Monitor report, prices for urea and phosphate fertilizers have risen sharply, further undermining affordability for farmers and increasing risks to future global agricultural production.  (ILKHA)