Global food prices have reached their highest record in more than three years, driven by supply chain disruptions due to the war with Iran, raising the risk of higher costs for consumers. This was reported by Bloomberg.
The UN Food and Agriculture Organization’s food price index rose 1.6% in April from the previous month. Vegetable oils, meat and cereals rose the most, the UN Food and Agriculture Organization said in a report. In annual terms, the index rose by 2.5%.
The war with Iran, which has been going on for ten weeks, has effectively blocked the strategically important Strait of Hormuz. This has reduced the supply of resources needed by the agricultural sector, in particular diesel fuel and fertilizers. This has become one of the factors for further price increases. In the future, such a situation may reduce the production of agricultural products and affect the final cost of products.
“The agri-food sector remains stable for now, as it sells what has already been produced. However, the situation can change very quickly when the increase in raw material and energy prices is transmitted further down the chain – and then consumers will feel it,” said FAO Chief Economist Maximo Torero.
The increase in oil prices has also boosted demand for biofuels. As a result, the UN Vegetable Oil Price Index increased by 5.9% in April compared to March and reached its highest level since July 2022.
The FAO index reflects the cost of raw materials, not retail prices. Therefore, the increase in prices at the producer level will reach buyers with a certain delay.
At the same time, the April increase compared to March already indicates the risk of accelerating food inflation. This comes despite Iran considering a US-proposed deal to end the war that began in late February.
“If the conflict continues to the 90th day, the risk of a food crisis in late 2026 and 2027 will increase significantly,” Torero said.
The index, which takes into account the prices of cereals, sugar, meat, dairy products and vegetable oils, has been rising for the third consecutive month.
Meat prices rose 1.2% to a record high. The grain price index rose 0.8% due to weather risks and expectations of a reduced wheat crop in 2026. Farmers can switch to crops that require less fertilizer.
For Ukraine, as one of the world’s leading food exporters, this situation can generally have a positive effect, as it opens up opportunities for increasing export revenues. At the same time, Ukrainian consumers should expect an increase in the price of food products on the domestic market.
