FAO food price index rises to near four-year high in September

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FAO food price index high

Highlights

FAO Food Price Index rises to 136.0 in September from 134.0 in August, reaching its highest level in nearly four years due to gains in cereals, sugar, and vegetable oils.
International sugar prices hit an 18-month high and wheat futures a three-year peak in September, driven by El Nino concerns and war-related Black Sea disruptions.
FAO maintains its 2026 global cereal production forecast at 2.979 billion metric tons and lowers 2026/27 world cereal trade forecast by 0.7% due to weaker Black Sea exports.

September price gains across key commodities

As reported by Reuters, citing the United Nations' Food and Agriculture Organization, its Food Price Index averages 136.0 points in September, up from a revised 134.0 in August and the highest level in nearly four years.

The index, which tracks monthly changes in international prices for a basket of food commodities, is driven higher by gains in cereals, sugar and vegetable oils. Meat and dairy quotations decline during the month.

Concerns over a severe El Nino pattern push international sugar prices to an 18-month high, while war-related disruption to Black Sea trade sends wheat futures to a three-year peak early last month. FAO Chief Economist Maximo Torero says disruptions in the Strait of Hormuz and the Black Sea, combined with climate shocks, are building broader pressure on energy, transport and major food commodities.

Trade outlook signals further market strain

Torero says that, if sustained, the current pressures will pass through to consumer food prices, particularly in countries that depend heavily on food and energy imports.

In a separate report, FAO keeps its forecast for global cereal production in 2026 almost unchanged at 2.979 billion metric tons. That is 2.1% below the previous year's peak but still represents the second-largest harvest on record.

FAO also cuts its forecast for world cereal trade in 2026/27 by 0.7% from September, citing lower wheat and maize export expectations linked largely to constrained Black Sea shipping routes.

Our earlier article on surging U.S. refiners’ profits amid diesel and petrol supply disruptions explained how conflict-related shocks and attacks on energy infrastructure tightened fuel markets and pushed crack spreads to record levels. It also noted that refiners lifted output and exports to meet shortages, sparking a policy debate in Washington over possible export curbs or windfall taxes as pump prices rose.

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