Grocery costs surge to 4-year peak with Ukraine fallout as key driver
Photo: Price increases have affected Ukraine as well (Getty Images)
Global food prices rose in August to their highest level since late 2022. The reasons are unfavorable weather in Europe and Asia, as well as the war in the Black Sea, according to Reuters.
The FAO Food Price Index stood at 133.3 points in August compared to 130.8 in July - the highest reading since November 2022, although it remains 17% below the record peak of March 2022, recorded immediately after Russia's full-scale invasion of Ukraine.
"August’s increase in global food prices is a warning that the risk premium is returning to food markets: climate shocks, geopolitical tensions and disrupted trade logistics are converging to tighten supply expectations," said FAO Chief Economist Máximo Torero.
In August, all categories became more expensive - grains, oils, sugar, meat, and dairy products. Extreme heat in Europe hit corn and sugar beet harvests, while the expected El Niño heightened concerns about palm oil and sugar production in Asia. The escalation of Russian attacks in the Black Sea reduced grain shipments from Ukraine, while the US-Iran conflict is straining fertilizer supplies.
The FAO also lowered its forecast for global grain production in 2026 to 2.98 billion tons - 2% less than last year and the largest annual decline since 2018, although the total volume will still be the second-largest on record.
RBC-Ukraine has previously written about the food price situation in Ukraine against the backdrop of Russian strikes. The Ministry of Agrarian Policy explained when exactly food prices would rise and whether people should stock up - the ministry emphasized that prices are holding steady for now, but there is no reason to panic at store shelves.
This summer, Russian strikes hit distribution facilities of food producers, including Danone, Lactalis, and the Yahotyn Baby Food Dairy Plant - due to destroyed warehouses, businesses warned of supply disruptions. In just two days, August 27–28, a number of enterprises came under attack - from Epicentr to Khortytsia.
