Food Prices Rise to Highest in Three Years on Iran War Costs

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(Bloomberg) — Global food prices climbed to their highest level in more than three years as the Iran war disrupted supply chains, raising the prospect of larger bills for shoppers. 

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The United Nations’ index of food-commodity prices gained 1.6% in April from the previous month, led higher by vegetable oils, meat and cereals, according to a Friday report from the Food and Agriculture Organization. That’s 2.5% higher than a year ago. 

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The Iran war, now in its 10th week, has effectively shut the critical Strait of Hormuz, pinching flows of essential farm inputs such as diesel and fertilizer and boosting prices. That threatens to curb farmers’ production, eventually filtering down to food costs.

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“The agri-food industry is resilient for now because they are selling what they already produced,” FAO Chief Economist Máximo Torero said in an interview. “But this will change very quickly as commodity and energy costs are transmitted and then we will feel it as consumers.”

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Elevated oil prices have also boosted demand for biofuels, with the UN’s vegetable oils index climbing 5.9% from March to hit its highest since July 2022. 

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The index monitors raw commodity costs rather than retail prices, meaning there will still be a lag before the farmgate increase reaches consumers. Still, the gains from the  March level are the first sign that food inflation is likely to pick up, even as Iran weighs a US-proposed deal to end the war that began at the end of February.

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“If this goes to day 90, the possibility of a food crisis will be significantly higher in late 2026 and in 2027,” Torero said.

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The increase in the gauge — which tracks grains, sugar, meat, dairy and vegetable oil costs — marks the third consecutive month of gains. 

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The meat index climbed 1.2% to a record high, while the cereal price index rose by 0.8% on weather concerns and expectations of reduced wheat plantings in 2026, as farmers consider sowing less fertilizer‑intensive crops. 

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(Updates with quotes from FAO Chief Economist.)

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