UN Food Price Index Rose 0.6% in July to Highest Level Since January 2023, FAO Says
The Facts
- The FAO Food Price Index, which tracks monthly changes in international prices of a basket of globally traded food commodities, averaged 131.1 points in July — up 0.6% from 130.3 in June and 1.0% above its level a year earlier, the highest reading since January 2023.
- The FAO cereal price index rose 3.4% from June to 113.8 points, reversing a decline recorded in May, and stood 6.9% above its July 2025 level.
- Wheat prices rose 5.8% month-on-month, which the FAO linked to continued export disruptions from the Black Sea region, concerns about infrastructure damage, and the effect of recent heatwaves on yields.
- Sugar prices rose 5.6% and vegetable oil prices rose 2%, with the vegetable oil index reaching its highest level since June 2022.
- The FAO said sugar price increases reflected concerns over the effect of hot and dry weather on European Union crop yields and over the El Niño weather phenomenon's impact on Asian production.
- Increases in cereals, sugar and vegetable oils were partially offset by declines in the FAO's meat and dairy price indices.
- The FAO's chief economist told Reuters that the world faces another bout of food inflation, citing wars involving Iran and Ukraine together with El Niño as creating a 'perfect storm' of higher costs and reduced crop yields.
- Despite the July increase, the index remains 18.2% below its record high of 160.2 points reached in March 2022.
- The FAO identified disruption to shipping in the Black Sea and at the Strait of Hormuz as contributing factors in the price increases.
Context
What is the FAO Food Price Index and what does it measure?
It is a monthly index published by the UN Food and Agriculture Organization that tracks changes in the international prices of a basket of globally traded food commodities, grouped into cereals, vegetable oils, sugar, meat and dairy sub-indices Times of India,cnbctv18.com,SAPO. It measures wholesale commodity prices on international markets rather than retail prices in shops, and is expressed in index points against a baseline Klix.ba,El Confidencial.
Which commodities moved most, and why?
Cereals rose 3.4%, led by wheat at 5.8% — attributed to Black Sea export disruptions, concerns over infrastructure damage and heatwaves in producing countries — and maize at 3.6%, linked to dry weather in the United States and firmer energy markets HABERTURK.COM,Sabah,Klix.ba. Sugar rose 5.6% on concerns about hot, dry weather in the EU and El Niño effects on Asian output, while vegetable oils rose 2% to their highest level since June 2022 BFMTV,SudOuest.fr,Zero Hedge. Meat and dairy prices fell, partially offsetting the increases elEconomista.es,Times of India.
How does this compare with recent price peaks?
The July reading of 131.1 points is the highest since January 2023, but remains 18.2% below the record 160.2 points recorded in March 2022 El Confidencial,elEconomista.es,HABERTURK.COM. The year-on-year increase was 1.0%, a smaller move than the month-on-month cereal and sugar swings, indicating the overall basket has risen modestly over 12 months even as individual commodities moved sharply SAPO,Times of India.
Where Left and Right agree, and where they split
- Where Left and Right agree
- Both accept the FAO's own causal account — heatwaves plus Black Sea disruption and war driving a 5.8% wheat jump — and treat the resulting staple-price burden as real, not statistical noise.
- Where Left and Right split
- Which households absorb the cost of food inflation, or a staple supply routed through chokepoints someone else controls.
How left and right read it
Wheat rose 5.8% in a single month, and the FAO points to heatwaves alongside continued Black Sea export disruption — its chief economist calls it a perfect storm. Climate and conflict, billed together. Food inflation lands hardest on households with the least slack, and June's European heat already forced growers to destroy millions of tonnes of grain; who is expected to absorb that cost?
“The heatwave that swept across Europe in June is estimated to have forced grain farmers to destroy 9m tonnes of crops, such as wheat, barley, maize and oats.” — The Guardian
The FAO logged a 5.8% monthly jump in wheat and tied it to continued Black Sea export disruption, infrastructure damage and heat-hit yields, with its chief economist naming wars involving Iran and Ukraine. That is a staple food routed through chokepoints someone else controls. Markets still work — meat and dairy fell, and the index sits 18.2% below its March 2022 peak. Build domestic productive capacity now.
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