Food prices rose sharply in March as war in the Middle East drove up energy prices and freight costs around the world, a UN report says.<\/p>\n
An index of food commodity prices by the UN\u2019s food and agriculture organisation increased by 2.4% in March, its second consecutive monthly rise.<\/p>\n
The index \u2013 which tracks grain, sugar, meat, dairy and vegetable oil costs \u2013 had risen for the first time in five months in February.<\/p>\n
The biggest increases were in vegetable oil and sugar prices, which increased by 5% and 7% respectively in March.<\/p>\n
There are fears that the war in the Middle East could trigger elevated food inflation<\/a>, as higher fuel, fertiliser and electricity prices push up the cost of moving, processing and cooking food.<\/p>\n About a third of fertiliser production travels through the strait of Hormuz<\/a>, a key shipping channel that has in effect been closed since the start of the war. UN projections indicate that global prices could average 15% to 20% higher<\/a> in the first half of 2026 if the crisis persists.<\/p>\n The report says<\/a>: \u201cPrice indices across all commodity groups \u2013 cereals, meat, dairy, vegetable oils and sugar \u2013 rose to varying degrees, reflecting not only underlying market fundamentals but also responses to higher energy prices linked to the conflict escalation in the near east.\u201d<\/p>\n Global wheat prices rose by 4.3% in March, it found, partly driven by deteriorating crop conditions and drought concerns in the US, as well as lower levels of planting in Australia owing to higher fertiliser costs. This was partly offset by better crop conditions in Europe, according to the report, and strong export competition.<\/p>\n In the UK, the Food and Drink Federation, which represents 12,000 food and drink manufacturers, has predicted food prices will rise by at least 9%<\/a> by the end of 2026, almost tripling a forecast of 3.2% that was made before the Middle East conflict.<\/p>\n Even that forecast assumes that the strait will reopen to cargo traffic within the next two to three weeks and the majority of large energy facilities, such as oil, gas and fertiliser sites, return to normal within a year \u2013 both of which are far from certain.<\/p>\n British farmers have already reported that producers of salad vegetables and dairy are running into problems. The British Tomato Growers\u2019 Association has warned that shoppers could see an increase in the price of tomatoes, peppers and cucumbers in the next six weeks as a result of rising costs of heating glasshouses using gas.<\/p>\n This week the chancellor, Rachel Reeves, met retailers including the bosses of Tesco, Sainsbury\u2019s, Morrisons, Marks & Spencer, Aldi and Lidl to discuss what could be done to ease the cost of living for consumers and how to strengthen supply chains.<\/p>\n