Global food commodity prices reached a three-year high in July, driven by the ongoing Ukraine war, Middle East conflict, and extreme heatwaves affecting crop yields. The UN's Food and Agriculture Organization (FAO) reported its Food Price Index climbing to 131.1 points, the highest since January 2023. Cereal, sugar, and vegetable oil prices all surged, while meat and dairy prices declined.

Wheat prices jumped 5.8% in July, nearly 10% higher than a year ago, primarily due to disruptions in Black Sea export flows and damage to export infrastructure compounded by heatwaves in key producing nations. Maize prices rose 3.6%, influenced by concerns over hot, dry weather in the U.S. Corn Belt and spillover effects from energy markets. Sorghum prices followed suit, while barley prices fell 1.9% due to favorable prospects in Australia and the Black Sea region.

Sugar prices increased 5.6%, pushed up by European heatwaves and El Niño fears impacting crop yields in Asia. Vegetable oil prices rose 2% to their highest since June 2022, driven by palm and soy oil increases. Sunflower and rapeseed oil prices dropped but were prevented from falling further by renewed Black Sea tensions. The FAO All Rice Price Index remained broadly steady in July.