FAO: War and Extreme Climate Trigger 'Perfect Storm' as Global Food Prices Surge to 3-Year High

According to the latest report released in August 2026 by the United Nations Food and Agriculture Organization (FAO), the global food price index averaged 131.1 points in July 2026, marking the highest level since January 2023—over three years ago. This surge is primarily driven by the dual pressures of escalating geopolitical conflicts and extreme climate conditions.

Among commodity groups, the cereal price index rose 3.4% month-on-month, with wheat prices jumping 5.8% due to disruptions in Black Sea exports and heatwaves affecting major producing regions.

Additionally, sugar prices increased by 5.6% amid climate concerns and rising expectations for ethanol demand in Brazil. The vegetable oil index also climbed 2%, driven by higher crude oil prices and increased demand for biodiesel. In contrast, meat and dairy prices saw slight declines.

Maximo Torero, FAO's Chief Economist, warned that the world is facing a new wave of food inflation, with the war between Iran and Ukraine, the El Niño phenomenon, and soaring energy costs converging into a 'perfect storm.' In particular, tensions in the Strait of Hormuz are affecting oil and natural gas supplies, increasing transportation costs and directly driving up fertilizer prices, thereby impacting planting decisions of agricultural producers worldwide.

Looking ahead, Torero noted that food prices may continue to rise through the end of 2026 and into 2027. There is typically a three- to six-month lag before commodity price increases are transmitted to consumer prices. Crop reductions caused by extreme weather could leave tens of millions of people globally at risk of severe food insecurity.