World food commodity prices rose for a second straight month in March, with increase largely driven by higher energy costs tied to the conflict in the Middle East.
The Food and Agriculture Organization (FAO) of the United Nations on Friday reported that its food price index averaged 128.5 points in March, up 2.4% from February. That is the highest since September and sits 1% above a year earlier. It marked the first release of the monthly index since the U.S. and Israel launched military strikes against Iran at the end of February, a conflict that has sent both energy and fertilizer costs soaring.
Although this past month’s increase in the food price index – which tracks monthly changes in the international prices of a basket of globally-traded food commodities – was relatively mild compared to the aftermath of the Russian invasion of Ukraine in February 2022, FAO Chief Economist Maximo Torero warned the impact will increase as the conflict drags on.
"Price rises since the conflict began have been modest, driven mainly by higher oil prices and cushioned by ample global cereal supplies," Torero said. "But if the conflict stretches beyond 40 days with high input costs with current low margins, 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."
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