FAO: Rising Energy Prices Push Global Food Indices Upward
On a yearly basis, the growth was 1%, although the current level remains 19.8% below the peak recorded in March 2022.
According to the FAO, the increase affected all key commodity groups—cereals, meat, dairy products, vegetable oils, and sugar. The main factors were market conditions and the response of commodity markets to rising energy prices amid the escalation of conflict in the Middle East.
The Dairy Price Index rose by 1.2% in March compared to February. This marks the first monthly increase since July 2025. The growth was driven by higher prices for skimmed milk powder, butter, and whole milk powder, while cheese prices declined. On an annual basis, the dairy index remains 18.7% below the level of March 2025.
The Cereal Price Index increased by 1.5% from February and by 0.6% on an annual basis. The most significant impact came from the rise in global wheat prices, which increased by 4.3%. This is attributed to worsening crop conditions in the United States due to drought concerns and the anticipated reduction in sowing areas in Australia amid expected higher fertilizer costs. However, the growth in quotations was partially offset by favorable sowing conditions in Europe and ongoing high competition among exporters with sufficient supply levels.
The Vegetable Oil Price Index increased by 5.1% compared to February and by 13.2% compared to March last year. The rise has continued for the third consecutive month. The price increases covered palm, soybean, sunflower, and rapeseed oils. Palm oil prices reached their highest level since mid-2022, surpassing soybean oil prices. Additional support for the sunflower and rapeseed oil markets came from reduced supply in the Black Sea region and expectations of increased demand for raw materials amid high energy prices.
In the meat market, the Price Index rose by 1% from February and by 8% on an annual basis. The main driver was a sharp increase in pork prices in the EU amid expected seasonal demand revival. Beef prices increased moderately, while lamb and poultry meat prices fell slightly. The decline in poultry meat prices is primarily due to cheaper Brazilian products amid significant supply and stable demand from importers. Meanwhile, shipments to Middle Eastern countries were redirected via the Red Sea.
The Sugar Price Index saw the most significant increase in March, rising by 7.2% from February. It reached its highest level since November 2025, although it was still 21% below the level of March last year. The FAO attributes this primarily to the rise in global crude oil prices, which heightened expectations that Brazil would increase sugarcane processing into ethanol. Additional influence came from concerns about the potential impact of the Middle Eastern conflict on global sugar trade. Nevertheless, a more substantial price increase was hindered by a generally favorable global supply outlook for the 2025/26 season, supported by strong harvest speeds in India and Thailand.
