Serious concerns about rising food prices

The Food Price Index of the Food and Agriculture Organization of the United Nations (FAO) rose by 2.4% in March. There is no end in sight: higher fertilizer and energy costs are forcing farmers to make tough choices.

Rising costs for energy and fertilizer

Global food commodity prices rose in March for the second consecutive month, largely due to higher energy prices linked to the escalation of the conflict in the Middle East. This marks the largest increase since September 2024: +2.4% compared to February. Prices are now 1% above the level of a year ago. The FAO Cereal Price Index rose by 1.5%, mainly due to higher global wheat prices, which rose by 4.3%. The Vegetable Oil Price Index rose by 5.1% and is 13.2% higher than a year ago. Meat prices rose 1%, dairy rose 1.2%, and sugar rose 7.2%.

Rising costs for energy and fertilizer are the causes. So far, food prices remain below the 2022 peak, but that may not last: “If the conflict stretches beyond 40 days with high input costs with current low margins, farmers will have to choose: farm the same with fewer inputs, plant less, or switch to less intensive fertilizer crops,” says FAO Chief Economist Máximo Torero. “Those choices will hit future yields and shape our food supply and commodity prices for the rest of this year and all of the next.”