Energy Shock Sparks Global Food Price Surge Amid Escalating Iran War

The food prices in the world have increased in March, which is partly attributed to the rising cost of energy, which has been associated with the increasing conflict in the Middle East, according to the United Nations Food and Agriculture Organisation.

 

The FAO food price index, which tracks the fluctuation of a basket of food commodities traded worldwide, averaged 128.5 points in March, 2.4 per cent higher than its revised February figure.

 

“The increases in price since the outbreak of conflict have been small, largely due to an increase in oil prices and supported by bountiful world cereal stocks,” according to FAO Chief Economist Maximo Torero in a statement.

 

However, when the war goes beyond 40 days in length, and input prices are high, farmers can reduce inputs, plant less, or change crops, which will reduce future yields and impact food supply and prices through the remainder of this year and beyond, he says.