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Prolonged Iran war could have ‘serious’ impact on food prices, says UN’s FAO

War in the Middle East is causing global disruption – from oil to agriculture – as countries, including China, enter spring planting season

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As China and other northern hemisphere countries enter spring planting season, the Food and Agriculture Organization of the United Nations has said war in the Middle East could have a serious impact on global food prices if it continues beyond three months. Photo: Xinhua
Mia Nurmamat
The United Nations has warned the conflict in the Middle East is sending shock waves from the fertiliser industry to food prices, as countries across the northern hemisphere – including China – enter their spring planting seasons.
If the conflict lasts longer than three months, the impact would become “significantly more serious”, affecting input costs in agriculture and disrupting the next planting season with longer-term consequences, chief economist of the Food and Agriculture Organization of the United Nations (FAO) Maximo Torero said in a podcast on Tuesday.

“That’s why it’s so important not to allow this to continue to escalate for an extended duration,” he said. “We need to try to figure out the alternative routes and no matter if they are not equivalent, but at least some routes that will help us to create some air, space so that the prices don’t move at a faster velocity.”

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The warning followed a Sunday report from the organisation which projected global fertiliser prices could remain 15 to 20 per cent above normal levels in the first half of the year if the crisis continued, driving up agricultural costs and food prices worldwide.

As up to 30 per cent of global fertiliser trade typically passed through the Strait of Hormuz, production cuts and transport disruptions have already blocked an estimated 3 to 4 million tonnes of fertiliser shipments per month, the report said.
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Countries around the Persian Gulf, including Iran, Saudi Arabia and Oman, are among the world’s leading exporters of nitrogen fertilisers such as urea and ammonia, accounting for roughly 30 to 35 per cent of global urea exports and 20 to 30 per cent of ammonia exports, according to the FAO.

Although China is also a major fertiliser producer, it still relies on imports of raw materials. About 47 per cent of its sulphur supply is imported, with roughly half coming from six countries bordering the Persian Gulf, according to a December report by Guosen Securities.
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