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The Middle East conflict has disrupted trade through the Strait of Hormuz and its impact could ripple far beyond the energy markets, risking a spike in global food prices.
The strait is not only a key artery for oil and gas shipments but also for fertilizers critical to global agriculture. Analysts told CNBC disruptions could feed through to higher farming costs, reduced crop yields and ultimately more expensive food.
“Higher energy and input costs risk reigniting global food inflation just as retail food prices had returned to more historical levels in many countries,” according to the International Food Policy Research Institute, or IFPRI.
Raj Patel, a research professor at the University of Texas, also warned that fertilizer disruptions linked to the conflict could amplify global food pressures through several channels simultaneously.
“The short answer is: significant, and faster than people think,” Patel said. “The Strait of Hormuz is a fertilizer chokepoint. Qatar, Saudi Arabia, Oman, and Iran together supply a substantial share of the world’s traded urea and phosphates, and virtually all of it transits Hormuz.”
Countries dependent on food imports directly as well as those reliant on fertilizers could face rising costs within weeks, particularly during key planting periods, said industry watchers.
Gulf countries face: immediate risk
The first region likely to feel the impact includes countries closest to the conflict.
“Regionally, consumers in the GCC are most exposed to short-term food price spikes due to their heavy reliance on maritime imports transiting the Strait of Hormuz,” said Bin Hui Ong, commodities analyst at BMI.
Persian Gulf economies such as Qatar, Bahrain, Kuwait and Saudi Arabia rely heavily on food imports shipped through the Strait of Hormuz. If shipping remains constrained, supplies would need to be rerouted through alternative corridors or transported overland at far higher cost, analysts said.
“When it comes to short term shortages, all countries around the Persian gulf west of Hormuz will struggle to get food imports in,” Mera said. “These countries will need to find alternative routes.”
He noted that wealthier states such as Qatar, Bahrain, Saudi Arabia and Kuwait have the financial resources to import food by air or overland routes if necessary, but poorer neighbors may struggle more.
“Iraq may suffer. Iran itself will also face scarcity,” Mera added.
Sub-Saharan Africa: most vulnerable
Beyond the Gulf region, the greatest risks may lie in parts of Sub-Saharan Africa, where farmers depend heavily on imported fertilizer and households spend a large share of income on food.
“Sub-Saharan Africa is the most vulnerable region,” said Patel. Data from the University of Texas at Austin shows that over 90% of the fertilizer consumed in sub-Saharan Africa is imported, mostly from outside the continent.
Nitrogen-intensive crops such as maize, a key staple across the region, are especially sensitive to fertilizer shortages, raising the risk of lower harvests and rising food prices, other experts highlighted.
“The poorest and most densely populated regions are likely to suffer the most,” said Rabobank’s Mera, including parts of sub-Saharan Africa.
Asian concerns
South and Southeast Asia could also face mounting cost pressures.
Major agricultural economies such as India, Bangladesh, Thailand and Indonesia rely heavily on imported fertilizers from the Gulf. A sustained disruption could drive up costs for farmers during key planting seasons.
“A farmer in Thailand who is 90% import-dependent, buying urea that’s made from gas, shipped through Hormuz, and priced in dollars that are strengthening because of geopolitical risk, faces a cost shock on every dimension simultaneously,” Patel said.
Staples in the region, which include rice and maize are among the most fertilizer-intensive crops.
Mera singled out Indonesia and Bangladesh among those likely to be worst affected in the region.
Longer-term view
If farmers respond to higher fertilizer prices by reducing its use, crop yields could decline and push food prices higher.
Brazil, one of the world’s largest agricultural exporters, could face rising costs if fertilizer markets tighten, said analysts. Brazil imports around 85% of its fertilizer, making its soybean and maize production highly dependent on global supply chains.
A prolonged disruption during Brazil’s key fertilizer import season could ripple through global crop markets, eventually impacting food prices.
Even if crop output remains relatively stable in the near term, rising energy costs alone could drive food inflation higher globally, experts said.
Energy plays a major role throughout the food supply chain, from powering farm machinery and producing fertilizers to transporting crops and processing them into food products.
“The bigger impact on consumer prices will not be the impact on agricultural commodities but the fact that energy is a big portion of the total retail food bill,” said Joseph Glauber, senior research fellow at the International Food Policy Research Institute.
Chris Barrett, an agricultural economist at Cornell University, said the scale of any price shock will depend heavily on how long shipping disruptions persist.
