Global Food Crisis Looms as Strait of Hormuz Disruption Continues

A prolonged disruption in the Strait of Hormuz could result in a global food 'catastrophe', according to the Food and Agriculture Organization (FAO). The organization's chief economist, Maximo Torero, and director of FAO's agrifood economics division, David Laborde, warned that the blockage of the key waterway is risking higher commodity prices and food inflation.

Although food prices have not risen yet due to existing stocks absorbing the shock, the situation may change 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.

Impact on Global Agriculture

Exports of 20 to 45 percent of key agrifood inputs rely on sea passage through the Strait of Hormuz, making global agriculture highly exposed to any disruption. 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.

Recent disruptions to gas supplies and shipping have already forced fertiliser plants 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.

'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.' 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.

Current Situation

Iran has brought traffic through the strait to a near-total halt in response to attacks from the United States and Israel. 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, saying the navy would hunt down and interdict ships in international waters that had paid Iran a toll to traverse the strait.