Finance
World Food Price Rise Set to Continue if Iran War Lasts, Fao Says
Published by Global Banking & Finance Review®
Posted on April 3, 2026
3 min readLast updated: April 3, 2026
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In March, the FAO reported that global food prices reached their highest level since September 2025, fueled in part by rising energy and fertiliser costs due to Middle East conflict. If the war persists beyond about 40 days, input constraints may shrink planting and curtail future yields.
World Food Prices May Rise Further if Middle East Conflict Persists: FAO
FAO Warns of Potential Food Price Increases Amid Ongoing Middle East Conflict
By Sybille de La Hamaide
PARIS, April 3 (Reuters) - World food prices climbed in March to their highest level since September last year and could rise further if the Middle East conflict that pushed up energy prices continues, the United Nations Food and Agriculture Organization said on Friday.
Impact of Conflict and Energy Prices on Food Costs
"Price rises since the conflict began have been modest, driven mainly by higher oil prices and cushioned by ample global cereal supplies," FAO Chief Economist Maximo Torero said in a statement.
Potential Long-Term Effects on Farming and Yields
But if the conflict lasts over 40 days and input costs remain high, farmers may reduce inputs, plant less, or switch crops to less intensive fertiliser crops, he said.
"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," he added.
FAO Food Price Index and Commodity Trends
The FAO Food Price Index, which measures changes in a basket of globally traded food commodities, rose by 2.4% from its revised February level. It is 1% above its value a year ago, although nearly 20% below its March 2022 peak, reached after the start of the war in Ukraine.
Fertiliser Costs Could Lead to Reduced Planting
FERTILISER COSTS COULD LEAD TO REDUCED PLANTING
Cereal and Grain Market Movements
The cereal price index increased by 1.5% from the previous month, led by a 4.3% increase in international wheat prices due to worsening crop prospects in the U.S. and expectations of lower plantings in Australia due to higher fertiliser costs.
Global maize prices edged up as ample global supply offset concerns over fertiliser costs, and indirect support from greater ethanol demand prospects linked to higher energy prices.
Rice prices dropped 3.0% due to harvest timing and weaker import demand.
Vegetable Oil and Sugar Price Changes
Vegetable oil prices increased 5.1%, marking the third consecutive monthly rise. Higher quotations for palm, soy, sunflower, and rapeseed oil reflected the impact of rising global energy prices and expectations of stronger biofuel demand.
Palm oil prices reached their highest level since mid-2022.
Sugar prices jumped 7.2% in March to their highest since October 2025, as higher crude oil prices drove expectations that Brazil, the world's largest sugar exporter, would channel more sugarcane into producing ethanol.
Meat Price Developments
Meat prices rose 1.0%, led by higher pig meat prices in the European Union and bovine meat prices in Brazil, while poultry prices edged lower.
Global Cereal Production Outlook
In a separate report, the FAO slightly raised its estimate for the 2025 global cereal production forecast to a record 3.036 billion metric tons. It would be 5.8% higher year-on-year.
(Reporting by Sybille de La HamaideEditing by Tomasz Janowski and Barbara Lewis)
Key Takeaways
- •World Food Price Index climbed 2.4% in March, surpassing the previous year’s level amid elevated energy-driven costs and abundant grain stocks.
- •If the Middle East conflict lasts beyond 40 days, high fertiliser costs could prompt farmers to reduce inputs or shift to less-intensive crops, harming yields and price stability.
- •Despite rising prices, 2025 cereal production is forecast at a record-high (~3.03 billion t), with robust stocks-to-use ratios (~31.9%), offering some supply cushion.
Frequently Asked Questions about World food price rise set to continue if Iran war lasts, FAO says
1Why have world food prices increased recently?
World food prices rose due to higher energy prices driven by ongoing conflict in the Middle East, which increased input costs for farmers.
2How does the Middle East conflict affect food prices?
The conflict pushed up oil prices, raising production costs for farmers and impacting the prices of food commodities worldwide.
3Which food commodities saw the largest price increases in March?
Sugar, vegetable oil, and wheat saw significant increases, with sugar prices jumping 7.2% and vegetable oils up 5.1% in March.
4How are fertiliser costs impacting farmers?
Rising fertiliser costs may lead farmers to plant less or switch to crops that require less fertiliser, potentially reducing future yields.
