Page 12 - Policy Economic Report - March 2026

POLICY AND ECONOMIC REPORT
OIL & GAS MARKET

3. FAO Food Price Index rises in February for first time in five months
The benchmark measure for world food commodity prices rose in February, ending a five-month
downward trend, as higher quotations for wheat, most vegetable oils and several meat types
outweighed declines in cheese and sugar prices, according to the new update released today by the
Food and Agriculture Organization of the United Nations (FAO).

The FAO Food Price Index, which tracks monthly changes in the international prices of a basket of
globally-traded food commodities, averaged 125.3 points in February, up 0.9 percent from its revised
January level while still 1.0 percent below its level a year earlier.

The FAO Cereal Price Index increased by 1.1 percent from January, driven primarily by higher world
wheat prices reflecting reports of frosts in parts of Europe and the United States of America as well as
ongoing logistical disruptions within the Russian Federation and the wider Black Sea region.
International coarse grain prices also posted a modest increase, while the FAO All Rice Price Index edged
up by 0.4 percent from the previous month, supported by sustained demand for basmati and Japonica
varieties.

The FAO Vegetable Oil Price Index increased by 3.3 percent in February, reaching its highest level since
June 2022. International palm oil prices rose amid firm global import demand and seasonally lower
outputs in Southeast Asia, while world soya oil prices increased on expectations of supportive biofuel
policy measures in the United States of America.

Figure 6: FAO Food price index

Source - FAO, UN

FAO also released new wheat production forecasts for 2026, with preliminary outlooks pointing to a
likely global decline of around 3 percent to 810 million tonnes, albeit remaining above the past five-year
average. Farmers in the European Union, the Russian Federation and the United States of America are
expected to reduce the area sown to winter wheat in response to softer crop prices. The production

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