Global food prices showed a slight decrease in June 2026. This followed a period of growth driven by concerns over the Middle East war and potential drought in some parts of the world.
Global food prices showed a slight decrease in June 2026. This followed a period of growth driven by concerns over the Middle East war and potential drought in some parts of the world.
According to the FAO Food Price Index, which reflects monthly changes in international prices for a basket of food commodities, there was a moderate drop of 0.3% compared to May. The current index level stands at 130 points. The main factors contributing to the easing of price increases were sugar, grains, and dairy products.
Despite the current decline, the index remains 2% above last year's levels. Experts believe that if the war between the US and Iran concludes, the situation with food prices could improve significantly in the coming months.
Agbiz chief economist Vandile Sikhlobo noted that initial fears about the start of a war could exert upward pressure on global food prices. However, he stressed that the Middle East conflict will not have as devastating an impact on global food prices as the start of the war between Ukraine and Russia. Furthermore, the FAO Food Price Index is currently 19% below its peak reached in March 2022, when the war in Ukraine and Russia began.
Sikhlobo highlighted two key differences between these conflicts that affect agriculture and food prices differently. Firstly, there is currently a sufficient global grain supply, which exerts significant downward pressure on prices. For instance, the International Grains Council (IGC) forecasts grain and oilseed production for 2025–26 at 2.5 billion tons, which is 9% more than the previous year. Major crops include corn, wheat, soy, and rice, as well as various fruits and nuts, whose harvests were also abundant in leading producing countries.
Secondly, the Middle East is not a major grain producer but rather an importer. Therefore, the war amidst ample global grain supply is unlikely to trigger an immediate noticeable spike in grain prices. Nevertheless, the conflict's impact on the fertilizer market was evident, causing concern ahead of the 2026–27 agricultural season.
However, assuming peace is likely to be established, a gradual decrease in fertilizer and oil prices is expected, mitigating this potential risk for the 2026–2027 season. Sikhlobo warned, however, that the reduction will not be complete, as some countries may have already purchased fertilizers at high prices and passed these costs on to farmers, who will ultimately decide on planting areas for the 2026–2027 season.
In Sikhlobo's view, a reduction in planted areas could lead to a contraction in agricultural supply. Nevertheless, it is too early to draw definitive conclusions about how the upcoming season will unfold globally, although the planting season has generally concluded in Northern Hemisphere countries.
In conclusion, data published this morning indicates a slight decrease in global food prices, reflecting the availability of sufficient supply in the world market. However, risks for future seasons remain due to potential drought linked to El Niño in some parts of the world. Although the pressure from higher resource costs has eased somewhat, final food prices next year will be determined by farmers' planting decisions and the 2026–2027 harvest.