Sugar prices drive UN FAO food price index higher in September amid tighter supply outlook
FAO’s food price index rose 1.5% month-on-month to 136 points in September, up 5.8% year-on-year, led by sugar and cereals. Sugar prices climbed 6.1% amid tightening 2026-27 supply prospects, while cereals rose 5.1%. Vegetable oils gained 0.9%, whereas dairy and meat prices declined.
World food prices rose in September as transportation disruptions and weather concerns tightened supplies and lifted prices of sugar, cereals, vegetable oils and other commodities, the Wall Street Journal reported.
The United Nations Food and Agriculture Organization’s (FAO) food price index averaged 136 points in September, up 1.5% from August and 5.8% from a year earlier. The increase was led by higher sugar and cereal prices, while transportation disruptions and adverse weather conditions added further pressure to global commodity markets.
Sugar prices increased 6.1% in September, marking their third consecutive monthly rise and reaching their highest level since April 2025.
The stronger sugar market reflects expectations of tighter global supplies in the 2026-27 season. Production prospects have weakened in several major producing regions, including Thailand, while concerns have emerged over India’s crop outlook amid below-normal rainfall and strengthening El Niño conditions.
In Brazil, heavy rainfall has disrupted harvesting in the Centre-South region, while lower sugar beet planting in the European Union has also contributed to a tighter supply outlook.
FAO Chief Economist Máximo Torero said global commodity prices were facing increasingly broad-based upward pressure as disruptions in the Strait of Hormuz and the Black Sea region coincided with climate-related shocks. He warned that sustained increases in energy, transportation and food commodity costs could eventually feed through to consumer food prices.
Cereal prices also provided significant support to the overall food price index, rising 5.1% in September and reaching 17.2% above their year-earlier level.
Wheat prices climbed to their highest level since August 2023, driven by trade disruptions in the Black Sea region and dry conditions in parts of North America. Maize prices reached a more than three-year high as the supply outlook tightened following weaker-than-expected yields in the United States and lower export availability from Brazil.
Prices of sorghum, barley and rice also increased during the month. Rice prices were supported by weather concerns and seasonally tighter supplies.
Vegetable oil prices increased 0.9% in September and remained more than 18% above year-earlier levels. Palm oil led the gains on strong global demand and concerns over dry weather in Southeast Asia. Sunflower oil prices declined amid expectations of ample supplies from the Black Sea region, while soybean and rapeseed oil prices were largely unchanged.
Dairy prices were broadly stable, falling 0.1% in September and remaining more than 19% below their level a year earlier. Higher milk powder prices, supported by strong Asian demand and limited near-term supplies, largely offset lower cheese prices, while butter prices remained broadly stable.
The meat index also edged lower, mainly due to declines in poultry and pig meat prices. Poultry prices fell amid ample export supplies from Brazil and weaker demand from the European Union, while abundant supplies in major exporting countries weighed on pig meat prices. Bovine and ovine meat prices were broadly stable.
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Source : ChiniMandi
