Global Food Prices Rose as Dairy Prices Also Increased

The Food and Agriculture Organisation’s food-price index reached its highest level since 2022 in August. Dairy products were among the groups whose benchmark indices increased during the month, placing the sector within a broader rise across several food categories.

Cereal prices climbed by 2.2%, taking them to their highest point since May 2024. Vegetable oils advanced by 0.6% and reached their highest level since June 2022. Sugar recorded the largest increase among the categories cited, rising by 11.9% to its highest level since June 2025.

The FAO linked the sugar increase to lower output in Brazil’s Centre-South region, alongside weather concerns in Europe and Asia. In Europe, extreme heat and drought affected prospects for maize and sugar-beet harvests and also damaged livestock production.

Weather risks were also reported in Asia, where the possibility of a severe El Niño increased concern about palm-oil and sugar production. The source said that the combination of these developments meant that the August movement was spread across several commodities rather than being confined to one market.

Conflicts were listed among the factors affecting food markets. An escalation of attacks in the Black Sea reduced grain shipments from Russia and Ukraine, while the conflict between the United States and Iran disrupted the movement of fertilisers intended for crops.

Máximo Torero, the FAO’s chief economist, said the movement showed that a risk premium was returning to food markets. He said weather shocks, geopolitical tensions and interruptions to commercial logistics were converging and restricting supply expectations.

For dairy markets, the August data record an increase in the relevant index during a month in which climate conditions, conflict and trade-logistics problems appeared together in assessments of basic-food supplies. The source did not provide a separate percentage increase for dairy products.