• FAO food price index rose 2.4% in March, led by sugar and vegetable oils

• Higher oil prices are driving biofuel demand and tightening food supply outlook

• Prolonged Middle East tensions could fuel further increases and global food risks

Global food prices rose for a second straight month in March, reversing the downward trend seen at the start of 2026, according to the United Nations Food and Agriculture Organization (FAO).

The FAO food price index reached 128.5 points, up 2.4% from February and its highest level since December.

All major commodity groups recorded increases during the month, with vegetable oils and sugar leading the gains.

The vegetable oil price index climbed 5.1% from February and now stands 13.2% above its level a year earlier. The FAO said international prices for palm, soybean, sunflower, and rapeseed oils all moved higher, driven in part by rising crude oil prices, which have boosted expectations of stronger demand for biofuels.

Sugar prices posted an even sharper increase, rising 7.2% in March to their highest level since October 2025. The surge reflects higher crude oil prices, which are encouraging ethanol production in Brazil and raising concerns about reduced sugar supply on global markets.

Elsewhere, the FAO cereal price index rose 1.5% month over month, supported by a 4.3% increase in global wheat prices. Meat prices edged up 1%, while dairy prices increased 1.2%, mainly due to higher milk powder prices amid seasonal supply declines in Oceania.

Despite the recent gains, the overall index is only 1% higher than a year ago and remains about 20% below its peak in March 2022, reached after Russia’s invasion of Ukraine. Still, the FAO warned that conditions could tighten if tensions in the Middle East persist.

Since the outbreak of conflict involving Iran in late February, energy markets have come under pressure, with oil prices rising sharply. This has pushed up transportation, production, and agricultural input costs.

“Price rises since the conflict began have been modest, driven mainly by higher oil prices and cushioned by ample global cereal supplies,” said Maximo Torero, the FAO’s chief economist. He cautioned, however, that a prolonged conflict could have deeper consequences.

“If the conflict stretches beyond 40 days with high input costs with current low margins, farmers will have to choose: farm the same with fewer inputs, plant less, or switch to less intensive fertilizer crops. Those choices will hit future yields and shape our food supply and commodity prices for the rest of this year and all of the next,” Torero said.

The warning echoes concerns from other organizations. In a statement released March 17, the World Food Program said nearly 45 million additional people could fall into acute food insecurity if the conflict continues through midyear and oil prices remain above $100 per barrel.

A study published March 15 by Global Sovereign Advisory (GSA) highlights another risk. According to the document, rice is particularly exposed to disruptions in fertilizer shipments through the Strait of Hormuz.

“Three Asian countries—India, Pakistan, and Thailand—are both key suppliers to African markets and among the largest importers of fertilizers from the Gulf. India imports nearly 30% of its finished fertilizers from Gulf countries, including more than 15% from Saudi Arabia alone. Thailand and Pakistan import 21.1% and 29% respectively from the region. These rice-producing countries could be heavily affected by rising global fertilizer prices if the crisis continues,” the report said.

Espoir Olodo