U.N.: Iran war drives 2.4% increase in world food prices

April 3 (UPI) — The war in Iran has driven up global food prices and freight costs in March for the second month in a row, according to the United Nations Food and Agriculture Organization.

The prices have risen mostly because of energy-related pressures due to the war in Iran, the U.N. FAO Food Price Index report said. The report tracks monthly changes in international prices of globally traded food commodities.

The index said the average price of a batch of commodities was 128.5 points in March, which was up 2.4% from February and 1% above one year ago. The index, which tracks grain, sugar, meat, dairy and vegetable oil costs, rose in February for the first time in five months.

Vegetable oil and sugar prices saw the largest increase, up 5% and 7% respectively.

The war’s effect on fuel, fertilizer and electricity prices could drive prices up even further, raising food inflation.

About a third of fertilizer travels through the Strait of Hormuz, The Guardian reported. United Nations FAO projections show global prices could average 15% to 20% higher in the first half of 2026 if the crisis continues.

“Price indices across all commodity groups — cereals, meat, dairy, vegetable oils and sugar — 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,” the report said.

The longer the conflict continues, the longer the prices will stay high, a U.N. economist explained.

“Price rises since the conflict began have been modest, driven mainly by higher oil prices and cushioned by ample global cereal supplies,” said FAO Chief Economist Máximo Torero in a video interview. “But if the conflict stretches beyond 40 days with high input costs with current low margins, farmers will have to choose: farm the same with fewer inputs, plant less, or switch to less intensive fertilizer crops. Those choices will hit future yields and shape our food supply and commodity prices for the rest of this year and all of the next.”