FAO Warns of Rising Global Food Prices Amid Middle East Conflicts and War in Iran
The United Nations Food and Agriculture Organization (FAO) has announced that the global food price index reached its highest level since September of last year in March. The FAO warned that if conflicts continue in the Middle East, particularly the war in Iran, food prices could rise further.
Maximo Torero, FAO’s chief economist, stated that the recent price increases have been relatively limited and primarily driven by higher oil prices. According to him, sufficient grain supplies in global markets have so far prevented a sharp spike in prices.
However, Torero cautioned that if conflicts last more than 40 days and production costs remain high, farmers may reduce the use of fertilizers and other inputs, decrease cultivated land, or switch to crops that require less fertilizer. This situation could affect future production, placing pressure on food supply and prices later this year and into next year.
According to the FAO report, the food price index rose 2.4% in March compared to February and was 1% higher than the same time last year; although the index remains nearly 20% below its historic peak in March 2022, following the onset of the Ukraine war.
In the cereals sector, the price index increased by 1.5%, mainly due to a 4.3% rise in wheat prices on global markets. Poor production prospects in the United States and the likelihood of reduced planting in Australia as a result of high chemical fertilizer costs have been cited as factors behind this increase. Global corn prices also rose slightly, but abundant global supply has offset some concerns about fertilizer costs. Conversely, rice prices fell by 3% due to harvest season and reduced import demand.
Prices of vegetable oils rose by 5.1%, marking the third consecutive month of increases in this index. Rising prices for palm, soybean, sunflower, and rapeseed oils have been mainly attributed to higher energy costs and growing demand for biofuels. Palm oil prices reached their highest level since mid-2022.
Sugar prices also increased by 7.2% in March, reaching their highest level since October 2025. The rise has been linked to higher crude oil prices and the possibility that a larger share of sugarcane in Brazil, the world’s largest sugar exporter, will be allocated for ethanol production. Meat prices grew by 1%, largely due to higher pork prices in the European Union and beef prices in Brazil, while poultry prices declined slightly.
In a separate report, the FAO slightly raised its forecast for global cereal production in 2025 to an unprecedented 3.036 billion tonnes, representing a 5.8% increase compared to last year.
