A fragile recovery in global food prices recorded in February is now being tested by escalating conflict in the Middle East, as threats to the Strait of Hormuz ripple through grain, energy and freight markets. Global food commodity prices rose in February, ending a five-month decline as firmer wheat and vegetable oil quotations outweighed falls in sugar and dairy prices, the United Nations food agency said.

The FAO Food Price Index, which tracks monthly changes in a basket of globally traded food commodities, averaged 125.3 points in February, up 0.9% from a revised 124.2 points in January. Even so, the benchmark remained 1.0% below its level a year earlier and nearly 22% under the peak reached in March 2022, in the early phase of the Russia-Ukraine war.

Cereals were one of the main drivers of the monthly increase. FAO’s cereal price index averaged 108.6 points in February, up 1.1% from January, although still 3.5% below its year-earlier level. World wheat prices rose 1.8%, supported by frost concerns and winterkill risks in parts of Europe and the United States, as well as logistical disruptions in Russia and continuing tensions in the Black Sea region. Rice prices edged up 0.4%, underpinned by sustained demand for basmati and Japonica varieties, while barley and sorghum also strengthened on solid import demand.

Vegetable oils posted the sharpest monthly gain among the major components. FAO’s vegetable oil price index climbed 3.3% in February, reaching its highest level since June 2022. Palm oil prices rose on firm import demand and seasonally lower production in Southeast Asia, while soyoil prices were lifted by expectations of supportive U.S. biofuel policy measures. Rapeseed oil prices also rebounded on prospects of stronger demand for Canadian supplies, although sunflower oil prices eased as export availability from Argentina increased.

Meat prices rose 0.8% from January, led by record ovine meat prices and stronger beef demand from China and the United States. By contrast, FAO’s dairy price index fell 1.2%, largely because of lower cheese prices in Europe, even as milk powder and butter quotations increased on tighter supplies and firmer import demand from North Africa, the Near East and Southeast Asia. Sugar prices posted the steepest decline, falling 4.1% month on month and 27.3% from a year earlier on expectations of ample global supplies.