Food shortages and rising costs: UN agency warns of global food crisis if Hormuz remains blocked

The international community stands on the precipice of a global food crisis, with the ongoing closure of the Strait of Hormuz posing a severe threat to food security worldwide. Experts from the Food and Agriculture Organization of the United Nations are issuing stark warnings about the ripple effects of this critical waterway's blockage by both Iran and the United States.

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We have 30-35% of the crude oil, which is not moving, 20% of natural gas... and between 20-30% of other fertilizers that are not moving out. That’s the magnitude of the potential impact.

The strait, a vital artery for global trade, normally handles a substantial portion of the world's liquefied natural gas and crude oil. Its closure means that 30-35% of crude oil and 20% of natural gas are not moving, alongside 20-30% of essential fertilizers. This disruption has left numerous vessels stranded, with shipowners and insurers hesitant to risk their crews and cargo, signaling an imminent halt in vital supplies.

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We are going to see the real stop in supply in the days ahead.

Compounding the crisis, farmers are facing increased costs and limited access to fertilizers, potentially forcing them to reduce inputs or shift crop types. This could lead to significantly lower yields in the upcoming harvest season. Furthermore, higher oil prices incentivize the diversion of crops like maize, sugar, and oilseeds towards biofuel production, tightening the balance between food and fuel. The FAO stresses the urgency of diplomatic solutions and appropriate policies to avert this unnecessary food crisis.

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If we don’t have the inputs in the time that is needed… that implies that producers will have to produce with less inputs. And therefore, they could have lower yields.