FAO Food Price Index sees second consecutive monthly rise, driven by energy prices

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. and rising fertilizer prices resulting in reduced plantings in Australia. Maize prices rose by less than 1 percent; this increase was tempered by strong global supplies, but the Index warns that concerns over fertilizer prices and increased demand for ethanol production could drive maize prices up further in the coming weeks. Rice prices fell by 3 percent based on strong harvests and falling import demand. 

The Vegetable Oil Price Index rose 5.1 percent in March, the third such increase in a row. Palm oil prices reached the highest level seen since 2022, largely driven by increasing crude oil prices and lower production in Malaysia. Soy oil prices rose less dramatically due to seasonally increased exports from South America. 

The Meat, Dairy, and Sugar Price Indices all rose in March, by 1, 1.2, and 7.2 percent, respectively. The Sugar Price Index reached its highest level since November 2025; the rise was driven largely by concerns over energy prices and anticipated growing demand for sugarcane-based ethanol.

The latest AMIS Market Monitor also emphasizes the growing impact that the conflict in the Near East and subsequent increasing energy prices is having on global commodity markets. The report calls for continued international cooperation and transparent information-sharing in the face of market uncertainty and geopolitical tension.

Wheat production forecasts for 2025 rose in March due to higher outputs in several producing countries. Utilization forecasts fell slightly based on falling feed use in Argentina, while trade forecasts rose due to expectations of rising imports by Iran. Global wheat ending stock forecasts increased as a result of reduced exports, increased imports, and strong harvest conditions. 

Maize production forecasts rose in March as a result of improved harvests in India and Mexico. Maize utilization estimates also increased based on higher feed use in several countries. Trade forecasts rose less sharply, while global maize ending stock forecasts rose based on increased estimates by Brazil and India. 

Rice production forecasts remained generally steady in March, with production expected to hit a peak based on expanded planting areas and record-breaking yields in several regions. Rice utilization forecasts are expected to increase by nearly 3 percent from the previous year due to higher food use, while trade forecasts fell slightly. Global rice ending stock forecasts remained unchanged, with stocks expected to reach a record high. 

Soybean production forecasts fell slightly in March, with weather conditions driving lower yields in several countries. Utilization expectations remained steady, with utilization forecast to increase by 4 percent from the previous year. Soybean trade forecasts remained stable, while ending stock estimates rose slightly. Soybean ending stocks are forecast to reach record levels.

The conflict in the Near East and the continued closure of the Hormuz Strait caused significant disruptions to fertilizer supply chains in March and drove fertilizer and input prices up dramatically. Coming on the heels of already high fertilizer prices, this latest shock has put even more pressure on markets and, by extension, farmers. 

Natural gas prices rose across nearly all markets around the world; this surge was driven by a combination of the closure of the Hormuz Strait and extremely low inventories in the European Union. Ammonia prices also increased in March due to the closure of the Strait and strengthening demand in several regions. 

Urea prices reached the highest level seen in over three years, while phosphate prices rose due in part to the Near East conflict and in part to China’s ongoing export restrictions. Potash supplies have remained generally stable despite the disruption in other markets; however, potash trade may eventually be impacted as purchasers spend more of their budgets on higher nitrogen prices.

Sara Gustafson is a freelance writer.