Newsletters
A fragile ceasefire between the United States and Iran has done little to reopen one of the world's most critical shipping corridors, with a newly announced American blockade on vessels using Iranian ports keeping supply chains strained and food security experts on edge.
The Strait of Hormuz has been effectively paralyzed since hostilities broke out on Feb. 28, leaving a significant share of the world's oil, natural gas and fertilizer stranded in the Gulf. The United Nations Food and Agriculture Organization warned this week that the disruption, if prolonged, could trigger a cascading food crisis stretching from Asia to sub-Saharan Africa.
"We have 30-35 per cent of the crude oil, which is not moving, 20 per cent of natural gas, and between 20 to 30 per cent of other fertilizers that are not moving out," said Maximo Torero, FAO Chief Economist. "That's the magnitude of the potential impact."
Weekend talks between Washington and Tehran, mediated by Pakistan, produced no breakthrough.
Despite the ceasefire, most vessels remain stranded in the Gulf, with shipowners and insurers unwilling to risk assets and crews in an unstable environment. FAO officials warn that the apparent calm in global food markets is misleading.
Cargo that departed the Gulf before the crisis has largely reached its destinations, meaning the world is now entering a phase where shortfalls will become more visible. "We are going to see the real stop in supply" in the days ahead, said David Laborde, Director of FAO's Agrifood Economics Division.
The FAO Food Price Index for March recorded only modest increases, buoyed by strong global stocks and a favorable harvest last year. But economists caution that buffer is finite.
"We have enough supplies and good stocks which allow the agri-food system to be resilient to this shock," Torero acknowledged, while warning that conditions could shift rapidly.
The more lasting threat may be on farms, not in warehouses. Farmers across the Northern Hemisphere are currently in or approaching planting season, and rising input costs combined with constrained fertilizer supplies could force them to cut back, reducing yields for harvests later this year and into 2027.
Nitrogen-based fertilizers, which are derived from natural gas, are among the commodities most affected by the Hormuz disruption. If growers cannot secure inputs in time, "they will have to produce with less inputs," Torero said. "And therefore, they could have lower yields."
Higher oil prices are simultaneously creating incentives to divert maize, sugar and oilseeds toward biofuel production, further tightening the balance between food and fuel. "If we have rising demand because biofuels start to consume more and lower supply because we have less input, food prices will go up," Laborde said.
Countries in Africa, including Kenya, along with import-dependent economies across Asia and the Global South, face the sharpest exposure, given their reliance on imported energy and fertilizers and their position in the crop calendar.
The consequences are both economic and deeply human. Higher food prices disproportionately affect poorer households, while rising inflation could push governments to tighten monetary policy, slowing growth and deepening debt burdens across developing economies.
Early warning signs are already visible in South Asia, where rising fuel and fertilizer costs are beginning to filter into food prices and farm decisions. In Nepal, where millions of households depend on remittances from Gulf workers, higher transport costs and restricted mobility are compounding the pressure.
The risk is not confined to the developing world. Farmers in the United States, Canada and Australia also depend on stable access to energy and agricultural inputs.
Laborde warned that prolonged margin pressure on producers could push some into insolvency. "When you push them too much, you may bring them into bankruptcy. And then it means there will be a supply problem for a longer period."
FAO is calling on governments and international financial institutions to move quickly, citing a narrow window to prevent a manageable disruption from becoming a full-blown crisis.
Immediate priorities, the agency said, include refraining from export restrictions on fertilizers and food commodities, extending credit lines and import financing to vulnerable countries, and expanding social protection for affected households. Over the longer term, FAO is urging countries to diversify energy sources and reduce dependence on maritime chokepoints.
Torero was direct about the stakes. "The clock is the key. Let's avoid a perfect storm, be aware of the risks, put the right policies in place and pursue the diplomatic solutions needed to avert a food crisis we do not need."
Set as preferred source
Set as preferred source
1 min read
1 min read
