The FAO index reached 133.3 points in August amid logistics disruptions
Intensive strikes in the Black Sea have restricted grain shipments and caused the sharpest rise in global food prices since November 2022. The FAO food price index climbed to 133.3 points in August. This was reported by Economichna Pravda citing Reuters, according to the portal PromPolitInform.
In July, the index stood at 130.8 points, yet the current figure remains nearly 17% below the all-time high recorded in March 2022. In addition to restricted shipments from Ukrainian ports, export volumes from the rf have also declined, pushing global grain prices to a three-year peak.
Drivers of Food Price Inflation
According to the organization’s report, price increases were recorded across all major food categories in August, including dairy, meat, vegetable oils, sugar, and cereals. The market is also being negatively affected by weather conditions in Europe, where drought and extreme heat are lowering crop forecasts for sugar beets and maize.
The threat of the El Niño climate phenomenon has further fueled concerns regarding sugar and palm oil production in Asia. Meanwhile, geopolitical tensions, particularly the conflict between the US and Iran, have complicated supply chains for fertilizers.
Food Security Risks Assessment
FAO Chief Economist Maximo Torero warned that the confluence of climate change, logistics disruptions, and geopolitical tensions is simultaneously straining global food supplies. Against this backdrop, the pace of major grain exports from Ukraine has been steadily declining throughout August due to port security issues.
Photo: Economichna Pravda
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