Rising Energy and Fertilizer Costs Push Global Food Prices Up, FAO Says

Global food prices rose for the third consecutive month in April, driven largely by higher vegetable oil prices and growing pressure from energy and fertilizer markets, according to the latest report from the U.N. Food and Agriculture Organization (FAO). The FAO Food Price Index averaged 130.7 points in April, up 1.6% from March and nearly 2% higher than a year earlier, according to the agency. The sharpest increase came from vegetable oils, with a 5.9% surge in one month to its highest price index level since July 2022. Prices for palm, soy, sunflower, and rapeseed oils all climbed as rising crude oil prices increased demand for biofuels while also raising transport and production costs. FAO Chief Economist Máximo Torero said energy markets are increasingly feeding into agricultural inflation through both fuel costs and fertilizer prices. The report also warned that higher fertilizer costs are beginning to affect farming decisions. FAO said wheat prices rose partly because some producers are expected to reduce wheat planting and shift toward crops requiring lower fertilizer use. While the FAO did not directly link the rise to the ongoing war in the Middle East, the increase coincides with continued instability in global energy markets tied to tensions around the Strait of Hormuz, a key corridor for oil and fertilizer-related trade. Despite the pressure, FAO said global cereal supplies remain relatively solid. The organization raised its forecast for world cereal production in 2025 to a record three billion tonnes, helping prevent sharper food-price spikes. However, the agency warned that continued volatility in energy and shipping markets could place further strain on global food systems in the months ahead, especially through rising agricultural input costs and fertilizer disruptions.