The FAO Food Price Index advanced 1.5 percent in September as logistical constraints and climate risks restricted commodity availability. Cereal quotations surged 5.1 percent, driven by Black Sea shipping disruptions, Strait of Hormuz transit uncertainty, and dry weather in key growing zones.
The FAO Food Price Index averaged 136.0 points in September 2026, marking a 5.8 percent increase from the same period last year. The monthly rise was primarily fueled by intensifying freight disruptions across the Black Sea and the Strait of Hormuz, alongside adverse weather conditions impacting crop outlooks in North America and Southeast Asia.
The FAO Cereal Price Index increased by 5.1 percent month-on-month, anchored by a 6.3 percent jump in international wheat prices due to shipping bottlenecks and pre-sowing dryness. Maize quotations climbed 5.6 percent on reduced yield prospects in the United States, lower Brazilian export availability, and support from biofuel feedstock demand. Sugar prices experienced the steepest rise at 6.1 percent due to output cuts in Thailand, India, and the European Union alongside strengthening El Niño conditions. Conversely, meat prices fell 1.1 percent, while dairy edged down 0.1 percent.
GLOBAL CEREAL PRODUCTION AND TRADE FORECAST TO DECLINE
In its updated Cereal Supply and Demand Brief, FAO lowered its 2026 global cereal production forecast by 2.1 percent year-on-year to 2,979 million tonnes. Although improved weather in Australia raised the global wheat production outlook to 813.9 million tonnes, downward revisions for coarse grains in the US and EU offset these gains. World cereal trade is projected to contract by 3.5 percent to 505.8 million tonnes, heavily constrained by restricted Black Sea maritime routes and insufficient alternative transport logistics.
Maximo Torero
Highlighting the systemic risks facing global markets, FAO Chief Economist Maximo Torero noted that "disruptions in the Strait of Hormuz and the Black Sea combine with climate shocks, putting pressure on energy, transport and key food commodities."
The Agricultural Market Information System (AMIS) warned that elevated freight rates, firming fertilizer costs, and a strengthening El Niño event are introducing further unpredictability into global processing supply chains, particularly for Asian rice yields.