World food prices climbed in April to their highest level in over three years, primarily driven by soaring vegetable oil costs linked to the Iran war and the effective closure of the Strait of Hormuz.
The United Nations Food and Agriculture Organization (FAO) reported that its Food Price Index, which tracks changes in a basket of globally traded food commodities, averaged 130.7 points in April. This marks a 1.6% increase from March, representing the index’s third consecutive monthly rise and its highest point since February 2023. While significant, the index remains below its peak of 160.2 reached in March 2022 following the outbreak of the Ukraine war.
The sharpest increases were seen in the vegetable oil sector, where the price index jumped 5.9% month-on-month to its highest level since July 2022. This surge reflects higher prices for soy, sunflower, rapeseed, and palm oils. FAO Chief Economist Máximo Torero explained that these prices are largely being pushed up by elevated energy costs, which have in turn triggered higher demand for biofuels produced from oil-rich organic materials. Palm oil prices, in particular, have been heavily supported by biofuel policy incentives.
Despite the geopolitical disruptions, global agri-food systems are demonstrating notable resilience. Cereal prices experienced a modest increase of just 0.8% from March, kept largely in check by adequate supplies from previous harvests. Looking ahead, however, there are looming challenges for grain producers. Weather concerns, rising fertilizer costs, and biofuel demand continue to impact the market. The FAO warned of expectations for reduced wheat plantings in 2026, as surging input prices force farmers to shift toward less fertilizer-intensive crops.
On a positive note for global supplies, the FAO slightly increased its 2025 global cereal production estimate to a record 3.040 billion metric tons, which is 6% higher than the previous year’s levels.
In other commodity markets, April meat prices hit a record high, rising 1.2% from the previous month due to a limited supply of slaughter-ready cattle in Brazil. Conversely, sugar provided some relief to the index, dropping 4.7% thanks to forecasts of ample supplies coming from Brazil, China, and Thailand.