Global food prices rose in March for the second month in a row, as a result of higher energy prices linked to the Iran war. They are expected to increase further if the conflict is prolonged, a new report has found.
The UN Food and Agriculture Organisation's (FAO) food price index, which tracks the most globally traded food items, averaged 128.5 points in March 2026, up 3 points from February.
“Price rises since the conflict began have been modest, driven mainly by higher oil prices and cushioned by ample global cereal supplies,” FAO chief economist Maximo Torero said.
But if the conflict lasts for more than 40 days and input costs remain high, farmers may reduce inputs, plant less, or switch strategy to introduce less intensive fertiliser crops, he said.
“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.”
Iran war, now in its fifth week, has prompted a global energy crisis, with prices surging due to the disruption of supplies in the Strait of Hormuz and persistent Iranian attacks on Gulf infrastructure.
Oil prices rose by a record 60 per cent in March, with Brent the benchmark for two thirds of the world's seaborne oil, hitting nearly $120 per barrel.
Price indexes across commodity groups such as cereal, meat, dairy, vegetable oil and sugar, rose by varying degrees last month, as the Strait of Hormuz, a vital waterway for crude shipment, remains largely shut, resulting in higher crude prices globally.
The Rome-based FAO’s cereal price index rose 1.7 per cent in March from the previous month, while the indexes for vegetable oil, meat, dairy and sugar increased by 8.9 points, 1.2 points, 1.5 points and 6.2 points, respectively.
Among cereals, wheat increased by 4.3 per cent last month as a result of deteriorating crop conditions in the US amid drought concerns and expectations of reduced planting in Australia in response to anticipated higher fertiliser costs, the report said.
Maize also rose for the month but rice dropped, “driven by a combination of harvest pressure, weaker import demand and currency depreciations against the US dollar”, the FAO said.
Liquefied natural gas is also a critical feedstock for the production of fertilisers, such as urea. Supply of LNG to global markets has been affected by the war, with QatarEnergy, which provides 20 per cent of the world's supply, declaring force majeure last month after its chief production plant was attacked by Iran.
The Gulf region is also a vital supplier of urea and other ingredients in fertiliser production, including nitrogen and sulphur, that remains disrupted as the closure of the Strait of Hormuz continues.
About 30 per cent to 35 per cent of global nitrogen fertilisers currently go through the strait, while sulphur constitutes about 40 per cent to 45 per cent of total global exports from the Gulf.
Vegetable oil prices also rose during the month, a third consecutive monthly increase. This was driven by higher quotations across palm, soy, sunflower and rapeseed oils, with international palm oil reaching its highest price since mid-2022 amid sharp increases in crude oil prices and lower-than-expected production in Malaysia.
Sugar prices rose to reach their higher level since November 2025, the report said.
