The prices of food items across the world have increased to the highest level of 2022 in August. Last month, sugar prices increased by 11.9% and grain prices increased by 2.2%. According to the United Nations organization FAO, there is a fear of reduced supply of grains in the market due to severe heat-drought in Europe and the Russia-Ukraine war. The Global Food Price Index rose to 133.3 points in August from 130.8 points in July. However, it is still 17% below the all-time record level of March 2022. Due to weather conditions and geopolitical tensions, the extreme heat and drought in Europe has adversely affected the production of maize and sugar beet crops as well as livestock production. Additionally, the threat of the El Nino weather cycle has raised concerns about palm oil and sugar production in Asia. In the international market, not only the weather, but also the trade disruption caused by the Ukraine-Russia war and the US-Iran conflict have affected agricultural markets. Due to this, the prices of grains have reached the highest level in 3 years and the prices of sugar have reached the peak of one year. War impacts fertilizer and grain shipments Grain shipments from Russia and Ukraine have been affected by increased attacks in the Black Sea region. The conflict between the two countries has been going on for the last 4 and a half years. On the other hand, due to the ongoing tension between America and Iran, the supply chain of fertilizers required for crops is being adversely affected, due to which the pressure on both the cost and supply of farming has increased. Estimate of reduction in grain production by 34 lakh tonnes: In a separate report, the agency has reduced the estimate of global grain production for the year 2026 by 34 lakh metric tonnes to 2.980 billion tonnes as compared to July. This figure is down 2.0% from 2025, the largest annual decline since 2018. However, despite this reduction, this estimated production would be the second largest recorded production in history. The estimate of global grain stocks at the end of financial year 2026-27 has also been reduced by 1.1% to 947.2 lakh tonnes.
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Food items most expensive worldwide after 2022: Sugar prices increased by 11.9% and grain prices by 2.2% in August, situation worsened due to war and bad weather.
