Wheat surges 5.8 percent to push world food prices higher in July
The Food and Agriculture Organization’s Food Price Index averaged 131.1 points in July 2026, up 0.7 points or 0.6 percent on June and 1.3 points or 1.0 percent above July 2025, the organization reported on 7 August. The index remains 29.1 points, or 18.2 percent, below the peak it reached in March 2022.
The stability of the headline conceals a wide spread across the five sub-indices.
| Sub-index, July 2026 | Level | Change on June | Change on July 2025 |
|---|---|---|---|
| Cereals | 113.8 | plus 3.8 points, 3.4 percent | plus 7.3 points, 6.9 percent |
| Vegetable oils | 195.7 | plus 3.7 points, 2.0 percent | not published |
| Dairy | 116.2 | minus 0.8 points, 0.7 percent | minus 38.4 points, 24.8 percent |
| Meat | 127.7 | minus 3.6 points, 2.8 percent | plus 1.1 points, 0.8 percent |
| Sugar | 95.0 | plus 5.1 points, 5.6 percent | minus 8.3 points, 8.0 percent |
Cereals did the work. Within the sub-index wheat rose 5.8 percent on the month and stood, in the organization’s words, “9.9 percent above their year-earlier level”. Maize rose 3.6 percent, barley fell 1.9 percent and rice held broadly steady. The organization attributes the wheat move to continued disruption of Black Sea export flows and the effect of heatwaves on crop yields, and the maize move to hot and dry weather in the United States corn belt.
Vegetable oils reached their highest level since June 2022, which the organization explains as higher palm and soy oil prices more than offsetting weaker sunflower and rapeseed quotations. Sugar rose on concerns about hot and dry weather in the European Union and El Nino-related conditions in key Asian producers, together with stronger anticipated ethanol demand in Brazil, partly moderated by improved harvesting in Brazil’s centre-south.
The two declining sub-indices moved for narrower reasons. Dairy fell on lower butter and milk powder prices, extending an annual decline of 24.8 percent that is by some distance the largest movement anywhere in the index. Meat fell on lower quotations across every category except sheep meat, which the organization records reaching a new record high.
One point of housekeeping matters for anyone tracking the cereal balance sheet: the organization publishes no Cereal Supply and Demand Brief in January or August, so no cereal production, utilisation or stocks figures were issued alongside this index. The most recent brief is dated 3 July and puts world cereal production at 2,983 million tonnes, utilisation for 2026 and 2027 at 2,961 million tonnes, trade at 507.6 million tonnes, ending stocks at 957.8 million tonnes and the stocks-to-use ratio at 32.0 percent. Those figures belong to July and should not be attached to this release.
Why it matters: the headline index is close to flat on the year, which understates what is happening beneath it. A 24.8 percent annual fall in dairy is offsetting a 6.9 percent annual rise in cereals, and the two do not fall on the same households or the same importers. Our reading is that the headline understates the pressure, and that the number to hold on to is wheat at 9.9 percent dearer than a year ago. That is sixteen times the 1.0 percent annual move in the index itself. Wheat is also the least substitutable item in the basket: a household can switch away from butter or beef when prices move, but bread is bread.
Looking ahead: the next index is due on 4 September, alongside the next Cereal Supply and Demand Brief, which will be the first update to the balance sheet since 3 July. The wheat trajectory depends on whether Black Sea flows stabilise and on the extent of heat damage now being assessed.
Sources: Food and Agriculture Organization of the United Nations, Food Price Index, 7 August 2026; Cereal Supply and Demand Brief, 3 July 2026.
