ROME: The crisis caused by the conflict in the Middle East has not yet affected market food prices as the global agricultural sector had t...
ROME: The crisis caused by the conflict in the Middle East has not yet affected market food prices as the global agricultural sector had the reserve making it possible to keep the balance, FAO Economist Monica Tothova told TASS.
"Despite concerns about energy prices, fertilizer costs and freight disruptions, global food commodity markets have remained generally well supplied, supported by favorable crop conditions, comfortable inventories in several commodities and ample exportable supplies from key producers," she said.
"Another important factor is that energy shocks do not translate automatically into food price spikes. Higher fuel and fertilizer costs certainly raise production and transport expenses, but their impact is often moderated by other forces, including favorable weather, strong harvests, exchange-rate movements, existing input inventories, government policies and competition among exporters. As a result, the relationship between energy inflation and agricultural commodity prices is neither immediate nor one-to-one," the economist said, commenting on the latest data of the FAO Food Price Index.
The index lost 0.3% monthly in June 2026 and stood at 130.3 points. This FAO metric is currently 2.2% higher in annual terms.
"Timing also matters. The main risk from higher energy and fertilizer prices is often forward-looking rather than immediate. Farmers frequently secure inputs in advance, and crop production decisions are made months before harvest. Persistently high input costs can eventually affect fertilizer use, planting decisions and yields, but these effects tend to emerge with a lag. This is why the current situation is better characterized as a risk to future supply than a realized shortage today," Tothova noted.
It is also important to distinguish between international commodity prices and retail prices for foods, the FAO economist said. "Consumers pay for a much broader bundle of costs that includes processing, packaging, transport, labor, marketing, distribution, taxes and retail margins. In many food products, the raw agricultural commodity represents only a relatively small share of the final retail price. Consequently, even significant movements in energy or commodity markets are often only partially reflected in consumer food inflation, and usually with a delay," she added.
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