UN Food Price Index rises in July as heatwaves and energy costs drive cereal, vegetable oil and sugar higher

The United Nations Food and Agriculture Organization reported Friday that its benchmark Food Price Index edged up in July, driven by heatwaves, firming energy markets and geopolitical tensions that disrupted Black Sea grain exports.

The index, which tracks monthly changes in international prices of a basket of globally traded food commodities, averaged 131.1 points in July 2026. That represents an increase of 0.6 percent from June and 1.0 percent above its year-earlier level, the FAO said.

Cereals reverse earlier declines

The FAO Cereal Price Index rose 3.4 percent from June, reversing the declines seen earlier in 2025, and stood 6.9 percent above its July 2025 level.

Global wheat prices surged 5.8 percent amid heightened concerns over continued disruptions to Black Sea export flows and the likely impact of recent heatwaves on crop yields in several key producing countries, the agency said. World maize prices increased 3.6 percent, supported by concerns over hot and dry weather in parts of the United States and spillover effects from firmer energy markets amid heightened geopolitical tensions.

The FAO All Rice Price Index held broadly steady in July.

Vegetable oil at highest since 2022

The FAO Vegetable Oil Price Index increased 2.0 percent from June, reaching its highest level since June 2022. International quotations for palm oil rose, underpinned by firm demand from Indonesia’s biodiesel sector and higher crude oil prices, the FAO said. World soy oil prices also increased on the back of persistently robust feedstock demand in the United States and stronger global import demand. Global sunflower and rapeseed oil prices declined.

Sugar surges 5.6 percent

The FAO Sugar Price Index increased 5.6 percent in July, erasing its June decline, due mainly to concerns about the potential impacts of persistent hot and dry weather on crop yields in the European Union and of El Niño-related weather conditions on production prospects in key producing countries in Asia. Expectations of stronger demand for ethanol in Brazil following a temporary increase in the mandatory ethanol blend in gasoline also provided support, partly mitigated by improving harvesting conditions in Brazil’s key Center-South growing regions, the FAO said.

Meat and dairy decline

The FAO Meat Price Index weakened 2.8 percent from its record high in June, posting its first monthly decline this year. International poultry prices decreased due largely to lower quotations in Brazil amid ample export supplies, while pig meat quotations dipped amid abundant supplies in the European Union and subdued global demand. World bovine meat prices also eased, reflecting weaker import demand from Asia, while ovine meat prices rose to a new record high, supported by persistently tight exportable supplies in Oceania.

The FAO Dairy Price Index declined 0.7 percent in July, with quotations for whole and skim milk powders dropping along with those for butter. Prices for internationally traded cheese rose for the first time in a year as tighter seasonal milk supplies in the European Union more than offset continuing price declines in Oceania and pressure from ample export supplies and intensified competition from the United States.

Persistent hunger risks

The UN highlighted that despite slight improvements in harvests in some regions, millions of people continue to experience hunger and food insecurity. UN-backed food insecurity experts said Malawi is seeing a “notable improvement” in hunger levels compared with the last two years, largely because of a good harvest in the 2025/26 farming season following severe El Niño impacts in 2024/25. Nonetheless, an estimated 1.9 million people in the southern African nation are in crisis levels of acute food insecurity, classified as IPC Phase 3. The situation is expected to deteriorate during the October 2026 to March 2027 lean season, pushing 2.6 million people into crisis or level 3 hunger.

“High food prices, inflation, and below‑average staple production are driving acute food insecurity, while forecasts of strong El Niño during the 2026/27 rainy season underscore the need for close monitoring,” IPC experts said, as reported by the UN.

Outlook

Experts raised concerns about future developments in global food prices given numerous factors expected to exacerbate the situation, including inflation, below-average staple production, and forecasts of El Niño during the 2026-2027 rainy season, highlighting the need for close global monitoring. Many nations worldwide, including Djibouti, Afghanistan and Honduras, are experiencing food insecurity due to armed conflicts and climate change, placing the lives of millions at risk, according to the UN.