Disruptions to trade flows through the Strait of Hormuz have created major bottlenecks in fertilizer and energy supplies vital to agriculture, raising the risk of accelerating food inflation and a potential food crisis if the situation persists, the chief economist of the UN Food and Agriculture Organization (FAO) warned.
The Strait of Hormuz is one of the world's key energy chokepoints and a critical route for fertilizer exports from Gulf countries, which are major suppliers of urea, ammonia and other nitrogen-based fertilizers.
Maximo Torero told Anadolu that the strait previously accounted for 35% of the global fertilizer supply chain and 20% of phosphate fertilizer supplies, but trade disruptions have significantly reduced flows.
He said the conflict has contributed to a 50% increase in oil prices, a 25% rise in natural gas prices and a 55% jump in urea prices, while freight and bunker fuel costs have increased by around 43% and 58%, respectively.
"Corn has gone up 9%, soybeans 25%, wheat is going up 8%, and rice from 2% to 9%," he said. "This is the beginning of a process. As we move toward the end of this year, commodity prices will start to increase."
Torero said prices "have not yet increased too much" because of sufficient stocks from the previous harvest season, but warned that price increases could accelerate by mid-year or year-end, creating renewed food inflation pressures.
He said food inflation was already showing signs of accelerating in parts of Asia and warned that the effect could spread to Africa, Latin America and developed economies.
"The expectation is that this will continue to deepen by the end of this year and next year. We run a high probability of facing a significant food crisis if this is not resolved now," he said.
Torero noted that nearly one-third of the essential inputs used in agriculture have been affected by disruptions linked to the waterway.
He said the resumption of trade flows through the strait would help ease pressure on production supply chains, but warned that some effects may already be unavoidable because planting seasons are underway.
Torero said the FAO Food Price Index (FFPI) rose following the conflict but remains well below the peaks recorded during the COVID-19 pandemic.
He added that rising energy and transportation costs continue to put upward pressure on food prices.
"What worries me the most right now is the fact that we know now that there will be an impact in terms of yields, and we know now is that there will be less production -- how deep the problem will be will depend on what happens in the next days, but if El Nino starts to hit and it affects key exporting countries, then this situation could really exacerbate very quickly," he said.
"That's what worries me, because we are still in this process of transmitting the impacts to commodity prices, we are starting to see commodity prices going up and food inflation."
"But if El Nino starts to hit, as they are saying it will hit, then this thing will be exacerbating a lot, so then the jump will be significant very quickly, and then we'll be in a big problem, so again, my message is always 'let's stop what is human made, let's focus on what we need to focus,' which is a need," he noted.
"What happens if the strait opens tomorrow? Immediately, what will happen is that the oil prices will go down, and that, of course, is a good thing, because it will help us to regain the situation of operations," he added.
The Middle East accounts for around 30% of global fertilizer exports, according to data from the International Fertilizer Association (IFA).
Iran, Qatar, Saudi Arabia, the United Arab Emirates (UAE) and Bahrain accounted for 23% of global ammonia trade, 34% of urea trade and 18% of ammonium phosphate trade in 2024, the data showed.
Urea is particularly vulnerable because it is the most widely traded nitrogen fertilizer in the world.
Around 18.5 million tons of urea passed through the Strait of Hormuz in 2024, highlighting the potentially severe impact that prolonged disruptions to maritime shipping through the waterway could have on global fertilizer markets.
