Global food prices rose in July, with the UN FAO's food price index climbing 0.6% from June to 131.1 points, and 1% higher than a year ago. Heatwaves and supply disruptions in the Middle East and Black Sea regions pushed up costs and lowered crop yields. Cereal prices jumped 3.4%, reversing June's declines, driven by concerns over Black Sea export disruptions and heatwave damage in major wheat-producing nations.

Maize prices were also supported by hot, dry weather in the U.S. and geopolitical tensions. Sugar prices surged 5.6% due to drought concerns in the EU and El Nino threats in Asia, while vegetable oil prices rose 2%, reaching their highest level since June 2022. Palm oil gained on strong Indonesian biodiesel demand and higher crude prices, and soy oil rose on robust U.S. demand.

In contrast, sunflower and rapeseed oil prices declined. The near-total closure of the Strait of Hormuz sent fertilizer prices sharply higher, raising concerns over broader shocks to the global food system. Expectations of a strong El Nino weather phenomenon add to fears of disrupted harvests and tightened global supplies.