This is reported by Investing.com with reference to the Food and Agriculture Organization of the United Nations (FAO).
The FAO Food Price Index, which tracks monthly changes in international prices for a basket of basic food commodities, rose for the third consecutive month in April. It reached an average of 130.7 points, up 1.6 percent from March. This is the absolute maximum since February 2023.
FAO Chief Economist Maximo explained the mechanism behind the impact of geopolitics on food. According to him, prohibitive energy prices have forced the countries of the world to accelerate the transition to biofuels. As a result, huge amounts of organic raw materials (primarily oilseeds) are not sent to the food market, but to be processed into fuel for cars.
As a consequence, the FAO Vegetable Oil Price Index in April soared by 5.9% year-on-year to its highest level since July 2022. All key categories rose in price: soybean, sunflower, rapeseed and palm oil.
According to the source, meat prices also broke records, rising 1.2% in April, reaching an all-time high. The reason was a shortage of cattle ready for slaughter in Brazil.
Despite logistical chaos and supply chain disruptions due to war, global agrifood systems are showing resilience.
The Cereal Price Index rose modestly in April, up just 0.8% from March. As Torero noted, this increase, which affected wheat and corn, was driven by local weather anomalies, higher fertilizer prices and all the same demand from the biofuels sector. However, the grain market is being saved from a price explosion by ample stocks accumulated during previous harvest seasons.
UN experts warn of serious risks for the future harvest. FAO forecasts a reduction in the area under wheat in 2026. Due to soaring fertilizer prices, farmers around the world are forced to switch to less chemical-intensive crops.
