The cost of food commodities continues to rise globally, recording a third consecutive increase in April, driven primarily by rising energy prices and geopolitical tensions in the Middle East. This is according to the latest report released by the FAO, which highlights how the effective closure of the Strait of Hormuz is impacting fertilizers, transportation, and production costs throughout the agri-food supply chain.
The FAO Food Price Index, which tracks the main internationally traded agricultural commodities, reached 130,7 points in April, up 1,6% from March and 2% year-over-year. Growth was driven primarily by vegetable oils, meat, and cereals, while sugar and dairy prices declined.
On the cereals front, the index rose 0,8% compared to the previous month. Wheat prices increased 0,8%, buoyed by concerns about drought in the United States and the expected lack of rainfall in Australia. Rising fertilizer costs, linked to rising energy prices and logistical difficulties caused by the crisis in the Strait of Hormuz, also had an impact. According to the FAO, many farmers are considering reducing wheat plantings in 2026 to shift to less fertilizer-intensive crops.
Corn also rose (+0,7%), penalized by unfavorable weather conditions in Brazil and the United States, as well as strong demand for ethanol driven by rising oil prices. Sorghum, however, bucked the trend, declining 4% due to weaker international demand and improved production prospects in major exporting countries.
Vegetable oils saw a more marked rise. The FAO index for this sector rose 5,9% from March, reaching its highest level since July 2022. The market was driven by increases in palm, soybean, sunflower, and rapeseed prices. Palm oil, in particular, rose for the fifth consecutive month thanks to increased demand from the biofuel sector, boosted by rising oil prices and energy policies adopted in several producing countries.
"Despite disruptions related to the crisis in the Strait of Hormuz, global agri-food systems continue to demonstrate resilience," said Máximo Torero, FAO Chief Economist. "Cereal prices have increased only moderately thanks to still-large inventories, while vegetable oils are experiencing stronger increases due to increased demand for biofuels."
The FAO Meat Index also reached a new record, up 1,2% month-over-month and 6,4% from April 2025. Beef prices reached record highs, buoyed by limited supplies in Brazil due to herd rebuilding. Pork prices in Europe are also rising, driven by seasonal demand.
Dairy products, on the other hand, fell (-1,1%), penalized by the abundance of milk in the European Union and the increased production in Oceania, while sugar recorded a drop of 4,7% compared to March and a whopping 21,2% on an annual basis thanks to expectations of abundant global supplies, especially in China, Thailand and Brazil.
On the production front, the FAO maintains a relatively positive outlook. World cereal production in 2025 is estimated at 3,04 billion tons, up 6% from the previous year. The forecast for wheat in 2026 is more conservative: global production is expected to reach 817 million tons, approximately 2% lower than in 2025, amid continued high uncertainty over energy and fertilizer costs.
