World faces food ‘catastrophe’ if Strait of Hormuz disruption persists: FAO

Global agriculture is highly exposed to the waterway blockage, risking higher commodity prices and food inflation.

A prolonged disruption in the Strait of Hormuz could result in a global food “catastrophe”, the Food and Agriculture Organization (FAO) has warned, as shipments of critical agricultural inputs remain blocked in the key waterway due to the US-Israel war on Iran.

Food prices have not risen yet because existing stocks are absorbing the shock, the United Nations body’s chief economist, Maximo Torero, said in an interview on Monday, alongside David Laborde, director of FAO’s agrifood economics division.

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But if traffic through the strait does not resume, the shocks to energy and fertiliser markets will translate into higher commodity and retail prices later this year and into 2027, Laborde added.

Exports of 20 to 45 percent of key agrifood inputs rely on sea passage through the Strait of Hormuz, according to the FAO.

“We are in an input crisis; we don’t want to make it a catastrophe,” said Laborde. “The difference depends on the actions we take.”

“Right now, we don’t have a food crisis because we have food availability,” Torero added, noting that the increase in gas and oil prices has not translated yet into higher costs for bread and wheat, for example, thanks to ample supplies coming out of a good harvest season. “But this is now,” the economist said.

Fertilisers

Nearly half of the world’s traded urea – the most widely used fertiliser – and large volumes of other fertilisers are exported from Gulf countries via the Strait of Hormuz, making global agriculture highly exposed to any disruption there.

Recent disruptions to gas supplies and shipping have already forced fertiliser plants, which use natural gas to manufacture fertiliser, in the Gulf and beyond to shut or cut their output.

Should traffic continue to stall in the chokepoint, farmers will be forced to produce with less fertiliser or increase the cost of their product, Torero said.

“This is why it’s so essential that the ceasefire continue and is so essential that it is not just a ceasefire, but also that vessels start moving,” he said. “The clock is ticking.”

Torero added that poorer countries were most exposed because planting calendars meant delays in access to key inputs could quickly translate into lower output, higher inflation and slower global growth.

Iran has brought traffic through the strait to a near-total halt in response to attacks from the United States and Israel, which launched a war on Tehran on February 28, killing Supreme Leader Ayatollah Ali Khamenei.

The move has triggered a global energy crisis, doubling at times the prices of oil and gas compared with pre-war levels.

Over the weekend, Iranian and US representatives held a 21-hour marathon negotiation to reach an agreement for a permanent ceasefire, but failed to achieve a breakthrough.

US President Donald Trump then decided to impose a naval blockade on the strait. He said the navy would hunt down and interdict ships in international waters that had paid Iran a toll to traverse the strait.

Later, the US military said it would block all maritime traffic entering and exiting Iranian ports, including those in the Gulf and the Gulf of Oman.