Surging costs of meat and vegetable oil drove global food prices to a two-year high in July, according to data from the Food and Agriculture Organisation (FAO).
BusinessDay analysis of the FAO food price index report reveals that global food prices surged to their highest in two years with 130 points in July 2025, up from 125 points in 2023, reflecting a four percent rise in the period.
Although this was the highest food index reading since 2023, it is however, below the 2022 peak value of 145 points.
The United Nations report says that, “The FAO food price index averaged 130.1 points in July 2025, marking an increase of 1.6 percent from June. While the price indices for cereals, dairy and sugar declined, they were outweighed by increases in the indices for meat and vegetable oils.”
Global prices of vegetable oil, a key driver of the surge, rose 33 percent to 167 points in July from 126 points in 2023. Month-on-month, it also rose from 156 points in June.
According to the FAO, this was driven by higher quotations for palm, soy and sunflower oils, more than offsetting the decline in rapeseed oil prices.
“International palm oil prices rose for the second consecutive month in July, primarily underpinned by continued robust global import demand fuelled by improved price competitiveness compared to other vegetable oils,” it explained.
Similarly, global meat prices, another driver of the two-year surge, averaged 127 points in July, up 11 percent from their 114 points in the same period of 2023.
Year-on-year, meat prices were 6 percent higher than their value a year ago (117 points).
The increase was primarily driven by higher bovine and ovine meat prices, along with a slight increase in poultry meat quotations, while pig meat prices declined.
It was reported that global bovine meat prices reached a new record high, supported by higher quotations in Australia, underpinned by strong import demand, particularly from China and the US, which outpaced available export supplies.
While prices of vegetable oil and meat prices drove global food prices to their highest in two years, prices of sugar and dairy offset the surge.
Prices of dairy remained flat month-on-month at 155 points in July. The marginal decline – the first since April 2024 – was driven by lower international prices for butter and milk powders, which were largely offset by continued increases in cheese quotations.
Sugar prices also fell flat month-on-month to 103 points in July, marking the fifth consecutive monthly decline.
It was driven by early forecasts of a likely recovery in global sugar production in 2025/2026, resulting from expectations of larger outputs in India and Thailand.
Added to this were the favourable weather conditions in key growing regions in Brazil, which exerted downward pressure on world sugar prices in the month under review.
