Impact of the Crisis in the Strait of Hormuz on Fertilizer Supply and Food Price Warning
Contractions in the global food supply could increase agricultural costs and lead to major price increases in staple food products.
Disruptions in shipments in the Strait of Hormuz reduce the global fertilizer supply, increasing agricultural production costs and creating a risk of up to an 80 percent rise in food prices.
Strait of Hormuz and Trade Disruptions
Ongoing shipment disruptions in the Strait of Hormuz continue to create new and major pressure on global food prices. International Chamber of Commerce Secretary General John Denton stated that the tension between Iran and the US negatively impacts trade.
Severe Decrease in Fertilizer Supply
Interruptions in the Strait of Hormuz, through which about one-third of global fertilizer shipments pass, reduced capacity by 40 percent. This situation caused a volume of 2.7 million tons to be withdrawn from the global supply and led to rising costs.
Risk of an 80 Percent Increase in Food Prices
It was warned that if current conditions persist, increases of up to 80 percent in grain prices could be seen. It was emphasized that developing and import-dependent countries would be affected more by this situation.
Other Global Agricultural Risks
Risks on the global agricultural and food supply are not limited to the Strait of Hormuz. The effects of the Russia-Ukraine war on the Black Sea and El Nino weather conditions also threaten production.