The Food and Agriculture Organization (FAO) says intensifying conflict in the Persian Gulf ‘has triggered one of the most rapid and severe disruptions to global commodity flows in recent times’.
The Chief Economist with FAO Máximo Torero told journalists at UN Headquarters in New York on Thursday.
Torero said the crisis is affecting agricultural production and food security worldwide, with impacts on farmers but also migrant workers.
‘Temporality matters a lot right now and the clock is ticking very hard, and I think we need to find a solution as soon as possible’, he said.
Since the war erupted, tanker traffic in the Strait of Hormuz has declined by more than 90 per cent.
Normally, 35 per cent of global crude oil flows (about 20 million barrels) passes through the Strait daily.
This is alongside 30 per cent of fertiliser trade and a fifth of liquefied natural gas that passes through the critical maritime corridor each day.
As a result, farmers are facing ‘a double shock’ brought on by rising prices for fertiliser and fuel, both key for agricultural production.
African nations that depend on fertiliser imports are also vulnerable, he said, although ‘big exporters’ like Argentina, Brazil and the United States will also be affected.
If a solution is found soon, markets could stabilise within roughly three months but the picture changes if disruptions continue.
‘The medium-term scenario of a three-month blockade will affect all farmers globally, and then we will have different elements that could impact mostly in the next season’, he said.
This could lead to reduced crop yields and substitutions, the FAO official warned.
The situation, he said, could also spark competition from the biofuel sector, particularly if oil prices rise above 100 dollars a barrel.
While the situation would benefit farmers, ‘it will be bad for consumers because prices will increase’.
To mitigate the crisis, Torero stressed the need to find alternative maritime routes in the short term.
‘We need to provide emergency balance of payment support to import-dependent nations before planting windows’, he added.
In the medium term, countries must diversify fertiliser import sources, strengthen regional reserve sharing and avoid export restrictions, while increasing resilience will be critical in the long term.
‘We need to treat food systems with the same strategic importance as energy and transport sectors, investing accordingly to minimise those shocks’, he concluded.
