FAO Food Prices Rise Beside a Near-Record Cereal Harvest

The FAO Food Price Index averaged 136.0 points in September, its highest reading since November 2022, even as the agency kept a near-record cereal harvest on its books.

The United Nations Food and Agriculture Organization said the gauge rose 1.5 percent from a revised August level, led by sugar, wheat and maize, while meat and dairy prices slipped.

September’s 136.0 Print Is a Four-Year High

FAO released the September basket on October 2. The headline index averaged 136.0 points in September, up 2.0 points from August and 7.4 points, or 5.8 percent, from a year earlier. It remained 24.3 points, or 15.1 percent, below the March 2022 peak. That is a nearly four-year high, and the third monthly rise in a row.

Crop groups did the lifting. Cereals, vegetable oils and sugar all rose. The meat index fell and the dairy index edged down. The split is the story inside the print: the plants that move on ships got more expensive, and the animal products that are easier to oversupply did not.

FAO PRICE INDICES IN SEPTEMBER

The cereal index, at 122.8 points, jumped 6.0 points, or 5.1 percent, in a single month and stood 18.0 points, or 17.2 percent, above September 2025. Vegetable oils, already the most expensive group in the basket at 198.6 points, added 1.8 points. Dairy, at 119.1, is 19.1 percent cheaper than a year earlier, which is why the headline move still understates how hard grains and sugar ran.

FAO’s newsroom account put the same print on the record the morning it was issued.

The @FAO Food Price Index averaged 136.0 points in September, up 1.5% from August and 5.8% from a year ago.

Higher cereal, sugar and vegetable oil quotations outweighed declines in meat and dairy prices.https://t.co/hbQikhGj3v

— FAO Newsroom (@FAOnews) October 2, 2026

The Second-Largest Cereal Crop Is Still on the Books

The same day, FAO held its 2026 cereal production forecast at 2,979 million tonnes. That is 2.1 percent below last year’s all-time high and would still be the second largest harvest on record. A 5.1 percent monthly jump in cereal prices against a crop that large is not a missing-harvest story. It is a story about grain that is harder to move, and about pockets of weather damage that markets are pricing faster than the global total can calm them.

THE 2026 CEREAL BALANCE

• Production: 2,979 million tonnes, 2.1 percent below 2025, still the second-largest crop on record.
• Use: 2,966 million tonnes in 2026/27, up 4.1 million tonnes, or 0.1 percent, from 2025/26.
• Stocks: 950 million tonnes at the close of 2027 seasons, unchanged from opening levels, with a stocks-to-use ratio of 31.7 percent against 32.0 percent the season before.
• Trade: 505.8 million tonnes in 2026/27, down 18.3 million tonnes, or 3.5 percent, from the 2025/26 record, and cut 3.5 million tonnes, or 0.7 percent, from September’s forecast.

Inside that total, wheat output was raised 3.2 million tonnes this month to 813.9 million tonnes after better weather in Australia, and it is still expected to fall 3.3 percent from last year. Australian yields remain below average, and FAO flagged a risk of dry weather at the tail of the season. Coarse grains were cut 3.3 million tonnes to 1,612 million tonnes, down 1.3 percent year on year, after heat and dryness trimmed maize in the European Union and the United States. Rice, on a milled basis, is now 552.5 million tonnes for 2026/27, down 0.7 million tonnes from September and 2.4 percent below the 2025/26 record, with India weighing on the outlook after a poorly spread monsoon and tighter irrigation water in southern states.

World cereal use is barely higher than last season. Maize feed use was cut 4.6 million tonnes in Egypt, the EU and the United States, and that cut was offset by more barley, sorghum and wheat going into rations. Rice use is seen at 559.1 million tonnes, up 0.7 percent, on food demand. Stocks of wheat are being revised up in Australia, Russia and Ukraine, in part because less of that wheat is expected to leave. The cupboard is not empty. The export pipe is narrower.

Why Sugar Jumped 6.1% in One Month

Sugar posted the sharpest monthly move in the basket. The sugar index averaged 114.0 points, up 6.5 points, or 6.1 percent, from August and 14.6 points, or 14.7 percent, from a year earlier. It was the third straight monthly increase and the highest reading since April 2025, driven by a tighter 2026/27 supply outlook rather than a single failed crop.

FOUR SHOCKS BEHIND THE SUGAR JUMP

• Thailand: FAO cites lower expected sugar output in a major exporter.
• India: Below-normal rainfall and a strengthening El Niño have raised doubts about the next crop.
• Brazil: Heavy rain in the Centre-South growing region slowed harvest work.
• European Union: A smaller beet area plus poor growing weather point to a thinner beet crop.

Those four hits landed together. Brazil is still the giant of the trade, so rain that stalls Centre-South mills moves the world price even when other origins are only under a cloud. India and Thailand matter because the market was already looking for a tighter 2026/27 balance. The EU beet cut is smaller in tonnes and still removes a buffer that buyers used to count on when Asia wobbles.

Rice did not explode, but it did not help. The all-rice index rose 1.4 percent as Indica prices firmed on weather worries and seasonally tighter stocks. AMIS, which FAO hosts, said a strengthening El Niño is adding doubt, above all for rice in South and Southeast Asia. In a typical El Niño, rice yields run 1.0 to 1.5 percent below trend, wheat and maize stay near normal, and soybean yields often run 1.5 to 2.0 percent above trend. Stronger events tend to be more predictable. Weaker ones wander more. That is a second weather risk sitting on top of the shipping problem, and it is aimed at a staple that poor households cannot swap away from.

Black Sea Routes and the Hormuz Surcharge

World wheat prices rose 6.3 percent from August, the highest since August 2023. FAO tied most of that to shipping limits in the Black Sea, which pushed importers toward other origins, plus dry soils in parts of North America before winter-wheat planting. Daily wheat quotes did ease toward the end of the month. The monthly average still captured the spike.

Maize rose 5.6 percent, its highest level in more than three years. The list behind that move is longer: weaker-than-hoped yields in the United States, less export maize from Brazil, Black Sea trade breaks, and worry over fuel, fertilizer and freight tied to the Strait of Hormuz, which also supports prices of biofuel feedstocks such as maize. AMIS Monitor No. 142, issued the same day, said wheat jumped early in September on Black Sea export trouble, then faded as hopes for better flows returned, while elevated freight rates and firmer fertilizer markets kept the wider setting uneasy.

The Hormuz channel is older than this print. A UNCTAD brief dated as of March 10 found ship transits through the strait had fallen from 129 a day in early February to 4. In 2024, one-third of seaborne fertilizer trade moved through that gap, and several African and Asian buyers take a large share of their fertilizer from the Persian Gulf, including Sudan, Sri Lanka, Tanzania and Somalia. Between February 27 and March 9, international crude oil prices rose 27 percent and LNG rose 74 percent on that same brief. By September, FAO was still writing Hormuz uncertainty into maize as a fuel-and-freight surcharge, not as a grain cargo story. Dry bulk through the strait is only a sliver of the trade. Energy and fertilizer are the payload that shows up in the food index months later.

Trade numbers make the same point. FAO now sees world cereal trade at 505.8 million tonnes in 2026/27, down 3.5 percent from the record season. Wheat and maize exports were cut again this month because Black Sea routes stay constrained and alternative capacity is not filling the hole. Kazakhstan may ship more wheat. Russia and Ukraine are seen shipping less. EU maize exports were lowered on tighter supply, and Ukrainian maize on logistics. Australia is expected to send more barley, much of it to China. Sunflower oil prices fell for a third month on talk of ample Black Sea supply, and even that decline was capped by the same export-capacity bind. The oil is there. Getting it out still costs.

Poultry and Pig Meat Dragged the Meat Index Down

The meat index averaged 127.9 points, down 1.5 points, or 1.1 percent, from a revised August figure and in line with a year earlier. Poultry fell on ample Brazilian export supply and weaker EU import demand after new antimicrobial import rules took effect on September 3. Buyers had pulled purchases forward ahead of those rules, so September demand was softer, especially for higher-value cuts. Pig meat also fell as supplies built in major exporters. In the EU, animals returned to normal growth after the summer heat, which put more pork on the market.

Beef did not move as one market. Australian export prices dropped under heavier global competition. Brazilian quotes rose after the United States temporarily expanded its tariff-rate quota for lean beef trimmings on September 1, cutting duties on extra volumes. Sheep meat was little changed, with firm import demand supporting Oceania while New Zealand prices slipped with the currency.

Dairy barely budged on the month and looks cheap against last year. The index slipped 0.2 points, or 0.1 percent, to 119.1 as cheese prices fell and milk powder rose, with butter little changed. Cheese was heavy in the EU, where buying interest was weak and U.S. export supplies competed hard, and Oceania added seasonal volume. Powder found buyers in Asia and was tight for prompt delivery. That mix left international dairy 19.1 percent below a year earlier while cereals ran 17.2 percent above. A household that buys chicken, cheese and butter is not living in the same index as a miller covering wheat and a bottler covering sugar.

Torero Warns Import-Dependent Countries on Grocery Prices

Maximo Torero, FAO’s chief economist, tied the crop rally to two shipping theaters and to climate shocks at once, and he put the next bill on countries that import both food and energy.

We are seeing a persistent and increasingly broad based build up in global commodity prices, as disruptions in the Strait of Hormuz and the Black Sea combine with climate shocks, putting pressure on energy, transport and key food commodities.

If sustained, these pressures will soon pass through to consumer food prices, especially in food and energy import dependent countries.

Maximo Torero, FAO chief economist, October 2 index release

These are still wholesale export prices, not supermarket tickets. The lag is the live question. When cereal prices jump 5.1 percent in a month while the harvest is still the second largest on record, the first places that feel it are import-heavy diets, through bread, tortillas, cooking oil and sugar, before a national inflation print catches up. A farm sector as large as Brazil’s does not cancel that. Centre-South rain still delayed sugar, and FAO still cut Brazilian maize export supply, so even a country that grows the crop can feed the world price when the weather and the ships slip at the same time.

Palm oil, up for a fourth month on strong import demand and dry weather in Southeast Asia, is already pulling the vegetable-oil index. Soy oil held well above last year on biofuel demand. Those are the same energy-linked channels Torero named. World cereal stocks at 950 million tonnes and a 31.7 percent stocks-to-use ratio still read, in FAO’s own phrasing, as a comfortable global supply. Daily wheat prices eased late in September as hopes for better Black Sea flows returned. The monthly average still locked in the highest FAO reading since November 2022.