Main points
- Global food prices rose 1.6% in April due to higher prices for oil, grains, and meat caused by the war around Iran.
- The vegetable oil index rose 5.9%, and meat prices reached record levels, with the additional impact of rising demand for biofuels.
Food prices have increased / Photo Unsplash
Global food prices continued to rise in April, driven by higher prices for oil, grains and meat. One of the key reasons was the war around Iran, which disrupted the supply of fertilizers and fuel for the agricultural sector.
The war around Iran has affected the global agricultural market
The global food price index, calculated by the Food and Agriculture Organization of the United Nations (FAO), rose 1.6% in April from March, Bloomberg reports. In annual terms, the indicator exceeded last year's level by 2.5%.
The main drivers of the price increase were vegetable oils, grains and meat. Analysts attribute this trend to the protracted war around Iran, which has significantly affected global logistics chains.
The de facto blockade of the Strait of Hormuz has complicated the supply of critical resources for the agricultural sector, including diesel fuel and fertilizers. This has immediately affected the cost of agricultural products.
In April, the vegetable oil index rose by 5.9% and reached its highest level since July 2022. The FAO notes that additional pressure on the market is created by the growing demand for biofuels against the backdrop of high oil prices.
Grains and meat also continue to rise in price
The grain price index rose 0.8% in April. Market concerns have increased about a possible reduction in wheat plantings in 2026. Some farmers are considering switching to crops that require less fertilizer, as their cost has increased significantly.
Weather risks and concerns about future harvests are also having an additional impact. Some major European producers are already signaling a possible reduction in corn production due to rising resource prices.
At the same time, the meat price index reached a record high, increasing 1.2% in a month. Experts emphasize that the current increase primarily concerns the cost of raw materials, but with a certain time lag, it may also affect retail prices for consumers.
Analysts also note that April has become the third month in a row when the global food price index has shown growth.
The grocery basket is changing: what will happen to food prices in May?
In Ukraine, prices for a number of products are expected to continue to rise in May, despite weak purchasing power. Dairy products and cereals may become more expensive. The war in Iran plays a significant role in this price increase.
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Further increases in prices for dairy products and cereals, in particular buckwheat and millet, are expected in May.
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Prices for vegetables from the borscht set increased, while prices for meat fluctuated depending on the type.
The rise in the price of cereals is influenced by rising electricity and processing prices, rising transportation costs, inflation, and seasonal inventory reduction.