The UN Food and Agriculture Organization (FAO) announced on Friday that world food commodity prices rose for the second consecutive month in March, primarily due to higher energy prices driven by the escalation of the conflict in West Asia.

The average value of the FAO Food Price Index, which monitors monthly fluctuations in the global prices of a selection of internationally traded food products, was 128. 5 points in March, representing a 2. 4% increase from February and a 1. 0% increase over the previous year.

According to FAO Chief Economist Maximo Torero, price increases since the start of the conflict have been small, mostly caused by higher oil prices, and mitigated by abundant global cereal stocks.

“However, if the conflict lasts more than 40 days with high input costs and current low margins, farmers will have to choose between farming the same with fewer inputs, planting less, or switching to less intensive fertilizer crops. Those decisions will have an impact on future yields as well as influence the cost of our food supply and commodities throughout the remainder of this year and the whole of next year,” Torero said.

Higher global wheat prices, which rose 4. 3% due to drought-related deterioration of crop prospects in the United States of America and expectations of reduced plantings in Australia due to higher fertilizer costs, were the main factor behind the 1. 5% increase in the FAO Cereal Price Index from the previous month.

Concerns about fertilizer affordability and indirect support from increased ethanol demand prospects connected to rising energy prices were countered by abundant global availability, which led to a minor increase in maize prices globally.

Due to harvest timing, lower import demand, and currency depreciations versus the US dollar, the FAO All-Rice Price Index fell 3. 0% in March.

From February, the FAO Vegetable Oil Price Index rose 5. 1% to be 13. 2% higher than its level a year earlier. The surge in crude oil prices caused by spillover effects and catalyzed expectations of increased biofuel demand are mirrored in the rise in international prices for palm, soybean, sunflower, and rapeseed oil.

Due to rising pig meat prices in the European Union in anticipation of growing seasonal demand, as well as rising global bovine meat prices, particularly in Brazil, where tight cattle availability restricted exportable supplies, the FAO Meat Price Index increased by 1. 0% from the previous month.

Due to logistical difficulties restricting market access in the Near East, the cost of poultry and ovine meat decreased.

In March, the Sugar Price Index rose by 7. 2% and the FAO Dairy Price Index increased by 1. 2%.

A generally favorable global supply outlook for the current season, supported by excellent harvest progress in India and Thailand, was offset by increased expectations that Brazil, the major sugar exporter, would use more sugarcane to make ethanol in order to combat rising international crude oil prices.

FAO predicts a 1. 7% decline in global wheat production this year to 820 million tons, as most of the world’s wheat crop has already been planted.