Food commodity prices up on Mideast war: UN food agency

The war in the Middle East has pushed food commodity prices higher due to higher energy and fertiliser costs, the UN's food agency said Friday.

The UN's Food and Agriculture Organisation (FAO) said its Food Price Index, which measures the monthly changes in international prices of a basket of food commodities, had increased 2.4 per cent in March from February.

It was the second rise in a row, which the agency said was largely due to higher energy prices linked to conflict in the Middle East.

Within the index, the category of vegetable oil saw the sharpest rise, of 5.1 per cent over February, as palm oil prices reached their highest point since the middle of 2022, due to effects from spiking crude oil prices, FAO said.

However, a "broadly comfortable" supply of cereal has cushioned the damage from the conflict, FAO said.

"Price rises since the conflict began have been modest, driven mainly by higher oil prices and cushioned by ample global cereal supplies," said FAO Chief Economist Maximo Torero in a statement.

But he warned that if the conflict goes on beyond 40 days and the high prices on fertiliser continue, "farmers will have to choose: farm the same with fewer inputs, plant less, or switch to less intensive fertilizer crops".

"Those choices will hit future yields and shape our food supply and commodity prices for the rest of this year and all of the next."

Disruptions to production and supply chain routes had also introduced "additional uncertainty" into the outlook for wheat and maize, FAO found.