FAO warns of agri-food shock from Strait of Hormuz closure

The Food and Agriculture Organisation (FAO) of the United Nations warned that a prolonged closure of the Strait of Hormuz risks triggering a structural agrifood shock, which could culminate in a severe global food price crisis within six to 12 months.

The situation could be further exacerbated by the onset of the El Niño weather phenomenon, which is expected to cause droughts and disrupt rainfall and temperature patterns across multiple regions.

Because farmers are forced to plant with fewer inputs, crop yields are expected to drop over the next six to 12 months, resulting in global food shortages and severe inflation, as per ReliefWeb.

The Strait of Hormuz, a narrow waterway connecting the Arabian Gulf to the open ocean, acts as a global artery for both energy and agriculture. It facilitates the trade of up to  of internationally traded fertilizers and a significant portion of the sulfur required to manufacture them, as per FAO

The Chain Reaction

Energy epikes: A prolonged closure drives up oil and gas prices. Energy is required to physically move and operate the global food system.

Input shortages: Ships carrying vital materials (like nitrogen and phosphate) remain idle. Farmers facing shortages or prohibitively high costs for these nutrients cannot maintain optimal soil fertility.

Reduced yields: With fewer agricultural inputs available, crop yields per acre drop. This particularly threatens staples like wheat, rice, and maize. 

The 6-to-12-month lag

Because the world has some existing food reserves, a “buffer” period prevents immediate panic.

However, during this 6-to-12-month timeframe, planting seasons will inevitably pass without the necessary inputs, FAO warns.

When these lower-yield harvests materialize down the line, global food supplies tighten, culminating in skyrocketing retail food prices and widespread inflation. 

Humanitarian flows

To mitigate this outcome, the FAO recommended establishing alternative trade routes, managing export restrictions, safeguarding humanitarian aid flows, and building strategic reserves to absorb rising transport costs.

The organisation stressed that the window for proactive intervention is narrowing rapidly, noting that current decisions by farmers and governments regarding fertiliser application, imports, and financing will dictate whether a major crisis materialises.

According to the FAO, the shock is projected to ripple through consecutive phases, impacting energy, fertilisers, seeds, crop yields, and commodity prices before culminating in food inflation.

GN