The United Nations Food and Agriculture Organization’s Food Price Index averaged 128.5 points in March, a 2.4 percent increase from February and 1.0 percent above year-ago levels, driven primarily by higher energy costs stemming from the Middle East conflict.
Sugar led the surge at 7.2 percent, as Brazil is expected to divert sugarcane production toward ethanol amid elevated crude oil prices. Vegetable oils rose 5.1 percent — now 13.2 percent above last year — with palm, soy, sunflower, and rapeseed oils all climbing. Wheat prices jumped 4.3 percent on US drought concerns and reduced Australian plantings, while dairy gained 1.2 percent and meat edged up 1.0 percent. Rice was the lone bright spot, declining 3.0 percent on harvest timing.
FAO Chief Economist Máximo Torero warned that if the conflict persists beyond 40 days with sustained input costs, farmers may reduce fertiliser use, plant less acreage, or shift to less input-intensive crops — potentially affecting yields throughout 2026 and beyond.
For Sri Lanka, the data signals trouble ahead. The country recorded 2.2 percent inflation in March, but the food component — driven by import-dependent staples including wheat, sugar, and edible oils — could push headline figures significantly higher in coming months.
The combination of a weakening rupee, disrupted shipping routes through the Strait of Hormuz, and now rising global food commodity prices creates a triple threat to Sri Lanka’s cost of living. With fuel rationing already straining supply chains domestically, the pass-through from global food price increases to local markets may be faster and more pronounced than in normal conditions.
