World food commodity prices rose in March for the second month in a row.

This was due largely to higher energy prices linked to the conflict escalation in the Middle East, according to the latest benchmark measure released by the Food and Agriculture Organization of the United Nations (FAO).

The FAO Food Price Index, which tracks monthly changes in the international prices of a basket of globally traded food commodities, averaged 128.5 points in March, up 2.4% from February and 1% above its level a year ago.

FAO index

The FAO Cereal Price Index increased by 1.5% from the previous month, driven primarily by higher world wheat prices.

They rose 4.3% due to drought-related deterioration of crop prospects in the US and expectations of reduced plantings in Australia due to higher fertiliser costs.

Global maize quotations edged up slightly, as ample global availability offset concerns over fertiliser affordability and indirect support from greater ethanol demand prospects linked to the rising energy prices.

The FAO All-Rice Price Index declined by 3% in March, driven by harvest timing, weaker import demand, and currency depreciations against the US dollar.

FAO chief economist, Maximo Torero said: "Price rises since the conflict began have been modest, driven mainly by higher oil prices and cushioned by ample global cereal supplies.

"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."

The FAO Vegetable Oil Price Index increased by 5.1% from February to stand 13.2% higher than its year-earlier level.

International quotations for palm, soy, sunflower and rapeseed oil all rose, reflecting spillover effects from the sharp increases in crude oil prices, which catalysed expectations of stronger demand for biofuels, according to the FAO.

The FAO Meat Price Index increased by 1% from the previous month, driven by a surge in pig meat prices in the EU ahead of strengthening seasonal demand, along with higher world bovine meat prices, particularly in Brazil, where exportable supplies were curtailed by tightening cattle availability.

Ovine and poultry meat prices declined, partly due to logistical constraints limiting access to markets in the Near East.

The FAO Dairy Price Index increased by 1.2%, driven primarily by higher quotations for milk powders amid a seasonal decline in supplies in Oceania.

International cheese prices declined further in the EU driven by higher production and weak export demand, while rising in Oceania for the opposite reasons.

The FAO Sugar Price Index increased by 7.2% in March.

Rising expectations that Brazil, the main sugar exporter, would use more sugarcane to produce ethanol to counter higher international crude oil prices overweighed a generally favourable global supply outlook for the current season, supported by good harvest progress in India and Thailand.

Record wheat plantings in South Asia

FAO also released today updated assessments of global wheat and maize production in 2026.

Both appear on course to drop modestly from high levels, though remaining above their past five-year averages.

With most of the world’s wheat crop already planted, FAO forecasts worldwide harvests of 820 million tonnes, a 1.7% drop from the previous year.

Lower prices and adverse weather conditions are anticipated to curb wheat output in the EU, Russia and the US, while production in India is expected to hit a record high.

Improved rainfall is expected to improve yields and overall outputs in Iran, Turkiye, and across north Africa.

However, the FAO said that the escalation of conflict in the Middle East, with associated higher energy and fertiliser prices and disruptions to production and supply chain routes, as well as the prospect of some farmers shifting towards less fertiliser-intensive crops, has introduced additional uncertainty into the outlook for wheat and maize.

Maize harvesting is already underway south of the equator, and output is expected to be above average in Argentina, Brazil, and South Africa.

FAO has also updated several forecasts, now projecting global cereal production in 2025 at 3.04 billion tonnes, 5.8% higher than the previous year.

World rice output is projected to expand by 2%, driven by Bangladesh, Brazil, China, India, and Indonesia, to reach a record 563.3 million tonnes.

World cereal utilisation in 2025/2026 is forecast to rise by 2.4% on the year to 2.9 billion tonnes, while global cereal stocks will likely expand by 9.2% to 951.5 million tonnes.

The world cereal stocks-to-use ratio at the end of seasons in 2025/2026 is forecast to stand at 32.2%, underlining an overall comfortable global supply situation.

FAO’s forecast for world trade in cereals in 2025/2026 stands at 505.3 million tonnes.