Agricultural Inputs

The FAO Food Price Index rose for the second month in a row in March, up by 2.4 percent from February. As the conflict escalates in the Near East, global energy prices have surged, with varying impacts on commodity prices. The Index reached 1 percent above its March 2025 level but remains nearly 20 percent below the peak of March 2022. The Cereal Price Index increased by 1.5 percent in March, with all major cereals except rise seeing a rise in prices. Wheat prices rose by 4.3 percent due to concerns over drought in the U.S.

Key takeaways

•Shipping restrictions in the Strait of Hormuz have already driven sharp increases in fertilizer and energy prices.
•Higher prices could reduce fertilizer use and lower crop yields if the disruption persists, posing significant food security risks.
•Most vulnerable are countries heavily dependent on Persian Gulf fertilizer and natural gas—especially in Africa and South Asia.

If you’ve ever wondered why it is so difficult to change government programs that seem expensive or inefficient, you aren't alone. In agriculture, fertilizer subsidies are a classic example, often standing as a major hurdle to the global agenda of repurposing agricultural support toward more sustainable and nutritious outcomes. While economists frequently point out the fiscal and environmental flaws of these programs, they remain a mainstay of policy in many countries. A recent IFPRI Discussion Paper looks into the reasons behind this.

This blog post is part of a special series based on the October 2025 Commodity Markets Outlook, a flagship report published by the World Bank. This series features concise summaries of commodity-specific sections extracted from the report. Explore the full report here.

The FAO Food Price Index fell for the third month in a row in November, declining by 1.2 percent. Prices declined for all commodities except cereals. The Index in November stood 2.1 percent below its year-earlier level and nearly 22 percent below the peak of March 2022.