Food Price Index

The FAO Food Price Index is a key indicator that tracks changes in international food prices. It’s calculated by averaging the prices of five major food commodity groups: cereals, vegetables, dairy, meat, and sugar. These groups are weighted according to their share in global trade, and the base year for the index is 2014-16.As per the latest update from the United Nations’ Food and Agriculture Organization (FAO), food commodity prices increased in July 2025 to their highest levels in over two years.

About FAO (Food and Agriculture Organization):

• Mission: The FAO's primary objective is to combat hunger, improve nutrition, and secure food availability across the globe. Its long-term goal is to ensure food security for all, helping people access enough nutritious food for active and healthy lives.

• Membership: The FAO is made up of 195 members, which include 194 countries and the European Union (EU).

• Functions:

  • The FAO plays a pivotal role in international food security, coordinating efforts for agricultural development and nutrition.

  • Its efforts are supported by its sister organizations like the World Food Programme (WFP) and the International Fund for Agricultural Development (IFAD).

• Key Reports: Some of the FAO’s major publications include:

  • The State of the World’s Forests (SOFO)

  • The State of World Fisheries and Aquaculture (SOFIA)

  • The State of Agricultural Commodity Markets (SOCO)

  • The State of Food Security and Nutrition in the World (SOFI)

• Headquarters: Rome, Italy

Impact of FAO Food Price Index Increase:

The rise in food prices could signal potential problems for global food security, especially in lower-income regions where food costs comprise a large portion of household expenditures. Higher prices could worsen food insecurity, impact nutritional outcomes, and possibly lead to social unrest.