FAO Food Price Index Hits Four-Year High at 136 Points

On 2 October, the UN Food and Agriculture Organization published a number that should have made more news than it did. Its Food Price Index, which tracks monthly changes in the international prices of a basket of traded food commodities, averaged 136.0 points in September 2026 — up 1.5 percent on August, up 5.8 percent on a year earlier, and the highest reading since November 2022. It was the third monthly rise in a row, and it arrived at an awkward moment: the world is harvesting one of the largest grain crops in history, yet food is getting more expensive anyway.

Cereals did most of the damage. The FAO Cereal Price Index rose 5.1 percent in a single month and stood 17.2 percent above a year earlier. World wheat prices climbed 6.3 percent to their highest since August 2023, squeezed by logistical constraints in the Black Sea region and dry weather in parts of North America ahead of sowing. Maize rose 5.6 percent to its highest in more than three years, on concerns over US yields, reduced export availability in Brazil, and disruption to Black Sea trade. Sugar jumped 6.1 percent to an 18-month high as dry conditions in India and Thailand hit cane yields and traders priced in a severe El Niño. Vegetable oils rose 0.9 percent on the month and 18.3 percent on the year, and rice added 1.4 percent.

The strange part of this story is that scarcity is not the problem. FAO's October update held its forecast for 2026 world cereal production at 2,979 million tonnes — 2.1 percent below 2025's record, but still the second-largest harvest ever recorded. World cereal stocks at the end of 2026/27 are projected at 950 million tonnes, a stocks-to-use ratio of 31.7 percent. The grain exists. What has changed is the cost and reliability of moving it, and of growing the next crop. The Black Sea and the Sea of Azov handle only about 3 percent of global dry-bulk seaborne exports but roughly 14 percent of seaborne grain volumes, and attacks on ships, ports and terminals there escalated in July. About a third of seaborne fertilizer trade passes through the Strait of Hormuz, where a naval blockade has been running since spring; urea prices topped $850 a tonne in April, up 80 percent since February. FAO chief economist Maximo Torero warned that the pressures "will soon pass through to consumer food prices, especially in food and energy import-dependent countries" — a group that includes much of the Gulf, large parts of Africa, and several South and Southeast Asian economies that rely on imported wheat, rice and vegetable oil.

There is a genuine case against the rise continuing. Grain futures were already sliding in late October — wheat on a seven-week losing run, corn breaking below $4.70 a bushel — as the northern harvest pressed on the market. A record crop arriving in bulk has a way of humbling a price rally, and the FAO index itself is a monthly average of export quotations, so it can turn more slowly than the futures screens suggest. The question for the rest of the year is which force wins: the harvest, or the choke points.

I am betting, narrowly, on the choke points. The shipping disruptions have not eased — the Hormuz blockade is still in place, Black Sea trade is still constrained — and the El Niño now building toward its expected October–December peak threatens the next sugar and palm oil harvests just as the current ones disappoint. That is why my prediction for this piece is that the FAO Food Price Index for December 2026, published in early January 2027, will average above 140 points. It would need roughly another four points from September's 136.0, about one percent a month — close to the pace of the last three months, but far from certain if the harvest finally drags quotations down. I put it just below even odds, and I will be glad to be wrong: an index that falls from here means the grain that exists is finally reaching the people who need it. The World Food Programme counts 318 million people facing severe hunger this year, with only about half of the $13 billion it needs funded, and 2.7 billion people unable to afford a healthy diet. For them, the difference between 136 and 140 is not an index movement. It is dinner.