World food commodity prices rose in August as high temperatures and other weather risks raised doubts about supply, according to data released by the Food and Agriculture Organization of the United Nations (FAO). The FAO Food Price Index averaged 133.3 points, up 1.9 percent from the revised July level and 2.5 percent above a year earlier.

"August's increase in global food prices is a warning that the risk premium is returning to food markets," said FAO Chief Economist Maximo Torero. "Climate shocks, geopolitical tensions and disrupted trade logistics are converging to tighten supply expectations, showing that resilience, open trade and secure input flows are now central to global food-price stability."

Cereals led the move, with the cereal index up 2.2 percent as prices of all major grains rose on strong import demand and worries about crop prospects. Wheat gained 2.6 percent in the month and stood 15.0 percent above its year-earlier level, on continued disruption to Black Sea export logistics and lower production prospects across much of Europe after hot, dry weather. Maize rose 2.5 percent on yield concerns in parts of the United States, deteriorating prospects in the European Union, strong ethanol and feed demand, and input and export disruptions. The all-rice index rose 0.5 percent on sustained Asian and African buying.

Sugar was the sharpest mover, up 11.9 percent, on expectations of lower beet yields in the European Union after adverse weather, El Niño worries in key Asian producing countries, lower Brazilian output and India's announcement of duty-free raw sugar imports.

Vegetable oils rose 1.1 percent on higher palm and soy oil prices, while rapeseed and sunflower oil quotations eased on expectations of ample supply. Meat rose 1.0 percent, with poultry, pig and sheep meat all higher — pig meat driven mainly by high temperatures slowing animal growth in the European Union — while bovine meat fell as Chinese import quota allocations sharpened competition between Brazilian and Australian exporters. Dairy rose 2.3 percent as hot, dry weather tightened milk supplies in the European Union.

FAO's new Cereal Supply and Demand Brief, released the same day, forecasts global cereal production in 2026 at 2,980 million tonnes, down 2.0 percent from 2025 but still the second largest harvest on record. The maize forecast was cut to 1,309 million tonnes as worsening prospects in France and Poland outweighed better yields in Argentina and Brazil; wheat was raised to 810.7 million tonnes, 3.8 percent below 2025; and rice is put at 553.1 million tonnes, down 1.9 percent from the previous season's record on thinner producer margins and El Niño-related weather.

World cereal utilisation in 2026/27 is forecast at 2,965 million tonnes, 0.2 percent above the previous year. Closing stocks in 2027 are put at 947.2 million tonnes, slightly above opening levels, partly because restricted export routes are building wheat reserves in the Russian Federation and Ukraine. The stocks-to-use ratio is forecast at 31.6 percent, down from 31.9 percent but still comfortable by historical standards, while cereal trade is expected to fall from record levels to 509.3 million tonnes.

The Agricultural Market Information System, hosted by FAO, published its monthly Market Monitor the same day, describing futures markets as "generally bullish" for key crops and examining risk, policy and climate uncertainty in the palm oil sector.

Source: FAO Newsroom