FAO chief economist warns Strait of Hormuz disruption risks global food crisis

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 previously accounted for 35% of the global fertilizer supply chain and 20% of phosphate fertilizer supplies.

Price increases

Maximo Torero told Anadolu that 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. "Corn has gone up 9%, soybeans 25%, wheat is going up 8%, and rice from 2% to 9%. This is the beginning of a process," he said.

Food inflation risk

Torero said food inflation was already showing signs of accelerating in parts of Asia and warned the effect could spread. "We run a high probability of facing a significant food crisis if this is not resolved now," he said. Nearly one-third of essential agricultural inputs have been affected by disruptions linked to the waterway.

El Niño threat

"What worries me the most right now... if El Niño starts to hit and it affects key exporting countries, then this situation could really exacerbate very quickly," Torero warned. "If El Niño starts to hit, then this thing will be exacerbating a lot."

Fertilizer dependency

The Middle East accounts for around 30% of global fertilizer exports. Iran, Qatar, Saudi Arabia, UAE, and Bahrain accounted for 23% of global ammonia trade and 34% of urea trade in 2024. Around 18.5 million tons of urea passed through the strait in 2024.