The FAO Food Price Index edged up in February 2026, snapping a five-month losing streak as higher prices for cereals, meats and vegetable oils outweighed declines in dairy and sugar.
The global wheat market returned to the spotlight in February as the Food and Agriculture Organization of the United Nations (FAO) reported the first increase in global food commodity prices in five months. Rising wheat quotations driven by weather concerns and logistical disruptions in key exporting regions played a central role in pushing the FAO Food Price Index higher.
According to the latest update released by Food and Agriculture Organization of the United Nations, the FAO Food Price Index averaged 125.3 points in February, marking a 0.9 percent increase compared with January. Despite this monthly rise, the index remained 1.0 percent below its level from the same month last year.
Wheat prices lead cereal market gains
The FAO Cereal Price Index increased by 1.1 percent month-on-month, with global wheat prices acting as the primary driver of the increase. The organization noted that reports of frost damage in parts of Europe and the United States raised concerns about crop conditions, while ongoing logistical disruptions in Russia and across the Black Sea region further tightened supply expectations in international markets.
In addition to wheat, prices for coarse grains recorded a modest rise. Meanwhile, the FAO All Rice Price Index increased by 0.4 percent compared with January, supported by sustained demand for basmati and Japonica rice varieties in international markets.
Vegetable oils surge, sugar declines
sharply
While wheat drove gains in the cereal category, other commodity groups also influenced the overall food price index.
The FAO Vegetable Oil Price Index climbed 3.3 percent in February, reaching its highest level since June 2022. Palm oil prices rose due to strong import demand and seasonal production declines in Southeast Asia. Soybean oil prices also strengthened, supported by expectations of new biofuel policy measures in the United States. Rapeseed oil prices rebounded on prospects of stronger demand for Canadian supplies, while sunflower oil prices declined moderately amid increased export availability from Argentina.
In contrast, the FAO Sugar Price Index fell 4.1 percent from January and 27.3 percent compared with February 2025, reflecting expectations of ample global supply during the current season.
Global wheat production expected to
decline in 2026
Beyond short-term price movements, FAO’s latest market outlook suggests that global wheat production may face moderate downward pressure in 2026. Preliminary forecasts indicate that worldwide wheat output could decline by approximately 3 percent to around 810 million tonnes, although this would still remain above the average level recorded over the past five years.
The projected decline is largely linked to reduced planting intentions among farmers in major producing regions, including the European Union, Russia and the United States. Lower global wheat prices in recent months have discouraged producers from expanding winter wheat acreage.
In contrast, wheat production prospects in India remain broadly positive. Government support measures and record planting levels are expected to sustain strong output. Similarly, outlooks for Pakistan are favourable, while production prospects in China remain generally stable.
Global cereal production reaches record
levels
Despite the expected reduction in wheat plantings for 2026, FAO has revised upward its estimate for global cereal production in 2025, projecting a record 3.029 billion tonnes, representing a 5.6 percent increase compared with the previous year.
At the same time, global cereal utilization in the 2025/26 marketing year is expected to reach a record 2.943 billion tonnes, driven by rising consumption of wheat, coarse grains and rice.
World cereal stocks are projected to increase to 940.5 million tonnes, resulting in a global stocks-to-use ratio of 31.9 percent, a level considered comfortable by market analysts.
Global cereal trade is also expected to remain robust. FAO forecasts that international trade in cereals during the 2025/26 marketing year (July–June) will reach 501.7 million tonnes, representing a 3.5 percent increase year-on-year and the second highest level on record.
Rising geopolitical risks could affect
wheat production costs
In a separate analysis published through the Agricultural Market Information System (AMIS), FAO highlighted growing geopolitical risks that could influence global wheat production costs.
The report warns that escalating tensions in the Near East could lead to higher energy and fertilizer prices, increasing production and transportation costs for farmers and potentially affecting global grain markets.
Food security challenges persist in
vulnerable regions
Alongside its market outlook, FAO also reported that 41 countries worldwide require external assistance for food, according to a separate assessment released by its Global Information and Early Warning System (GIEWS).
Most of these countries are located in Africa, where conflict, insecurity and weather-related shocks continue to undermine agricultural production and food supply systems.
Among the 44 Low-Income Food Deficit Countries, FAO expects total cereal production in the 2025/26 season to decline by 1 percent, while consumption is projected to increase by 1.5 percent. As a result, cereal import requirements for these countries are expected to rise slightly to 55.7 million tonnes.
Wheat market outlook remains sensitive
to weather and geopolitics
Although global cereal stocks remain relatively comfortable, recent developments underline the continued sensitivity of the wheat market to weather conditions, geopolitical risks and logistical disruptions.
With frost concerns in key producing regions, potential reductions in planting areas and ongoing uncertainty in global supply chains, wheat prices are likely to remain a closely watched indicator for both agricultural markets and the broader food industry in the months ahead.