World food commodity prices rose month-on-month in March, led by vegetable oil and sugar, largely due to the cost of energy tied to the Iran war, a UN report shows.
The UN’s FAO Food Price Index averaged 128.5 points in March, up 2.4% from the revised February level – marking a second consecutive monthly increase.
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All five commodity groups tracked by the index – cereals, vegetable oils, meat, dairy and sugar – saw increases.
Vegetable oil prices climbed 5.1% to 183.1 points, its third straight monthly rise and 13.2% above last year’s level. The FAO attributed the growth to “higher quotations” for palm, soy, sunflower and rapeseed oils.
Palm oil hit its “highest” level since mid-2022 due to “spillover effects” from the increases in crude oil prices seen amid the war in Iran, the UN agency said on Friday (3 April). The FAO also pointed to “lower-than-expected” output in Malaysia.
Soy oil prices rose “marginally”, as expectations of increased biofuel consumption in the US were tempered by growing exports from South America.
The prices of sunflower and rapeseed oils were underpinned by Black Sea supply “tightness” and “stronger” feedstock demand, respectively.
Meanwhile, the FAO sugar price index surged 7.2% to 92.4 points, its “highest” level since November but 21% below its level in the prior year.
The rise was driven by higher crude oil prices, which raised expectations Brazil, the world’s top sugar exporter, would rely more on sugarcane-based ethanol during the upcoming harvest.
However, the FAO said the increase in global sugar prices was restrained by the “generally favourable” global supply outlook for 2025/26, supported by “good” harvests in India and Thailand.
The cereal index rose to 110.4 points, up 1.5% from February and 0.6% from March 2024, with gains in wheat, maize, barley and sorghum.
However, the price index for rice fell 3% due to “harvest pressure, weaker import demand and currency depreciations against the US dollar”, the FAO said.
The meat price index reached 127.7 points in March, marking a 1% monthly increase and an 8% rise year-over-year. The rise was driven by higher pig meat prices and a “modest” rise in bovine meat.
By contrast, ovine and poultry prices “softened”, the FAO said. Ovine meat prices fell on higher New Zealand exports, while world poultry prices dipped due to “weaker” Brazilian quotations amid high supplies.
The FAO Dairy Price Index rose 1.2% to 120.9 points – its first increase since July – on higher prices for skim milk powder, butter and whole milk powder. The index was 18.7% below the previous year’s level.
“By contrast, cheese prices declined further in the European Union, where increased milk availability, higher cheese output, and subdued export demand weighed on quotations, while prices in Oceania firmed, supported by tighter supply conditions and relatively strong demand.”
