Higher fertiliser and fuel prices can present global food price concerns. But this is not an immediate issue. Thus, some context on the global food price index data released earlier today, April 3, 2026, by the Food and Agriculture Organization of the United Nations (FAO) is necessary. The monthly FAO global Food Price Index averaged 128.5 points in March 2026, up 2% from its revised February level. This Index mainly measures the monthly change in international prices of a basket of agricultural commodities, not actual retail prices. Price indices across all commodity groups, cereals, meat, dairy, vegetable oils, and sugar, rose to varying degrees because of the slightly firming demand, and some worries about the seasons ahead. Essentially, the current levels of the Index are 1% above its value a year ago. Importantly, the current level is 20% below the peak reached in March 2022, which was the start of the Russia-Ukraine war. What is clear is that global agricultural prices, and mainly, grain, are likely to remain at reasonably lower levels for some time. Some may wonder why this is different from the 2022 Russia-Ukraine war, which led to a surge in grain prices and fertiliser prices. Two things are different from the 2022 Black Sea war. First, there are grain supplies currently, and this is adding a lot of downward pressure on global grain prices. Second, the Middle East is also not a major grain-producing region but an importer; therefore, a war at a time when we have ample grain supplies is not going to lead to an immediate increase in grain prices. We will only start to worry about the impact of all of this on global grain prices if the war continues for longer and that starts to impact fertiliser usage in the upcoming season. For now, though, it really is time to sit back and watch and hope that the war ends much sooner. The higher fertiliser prices will matter more for the 2026-27 season, and the farmers in the northern hemisphere will start planting next month, and in the southern only in October. If the higher fertiliser prices lead to a reduction in area planting, then we will start to worry about the grain prices then, and much of this will be clear from mid-year onwards. Subscribe ShareRead More
A word about global food prices and the Middle East issues
