A man-made conflict at a vital chokepoint exposes the systemic failure at the heart of our global food system. The war in Iran is disrupting the global food system, with one-third of the world's seaborne fertilizer trade passing through the Strait of Hormuz, a region facing severe disruptions. The timing of the war, coinciding with March, the month farmers buy fertilizer for spring application, adds to the critical nature of the situation. The lack of fertilizer availability threatens crops across the Northern Hemisphere, with the potential for a smaller harvest, driving up food prices. The impacts will extend from farm gates to supermarkets, as higher input costs impact packaging, transport, and processing. Vulnerable nations heavily reliant on food imports, like the Gulf states, are at risk due to the fragility of the global food system.
THE US-IRAN WAR IS NOT JUST SPIKING GAS PRICES; IT IS SYSTEMATICALLY DISRUPTING THE GLOBAL FOOD SYSTEM . MODERN AGRICULTURE IS, FOR BETTER OR WORSE, THE ART OF TURNING OIL AND GAS INTO FOOD.
AND THE PERSIAN GULF IS THE EPICENTRE OF THAT TRANSFORMATION. ROUGHLY ONE-THIRD OF THE WORLD’S SEABORNE FERTILIZER TRADE PASSES THROUGH THE STRAIT OF HORMUZ. THE GULF STATES ARE ALSO CRITICAL SUPPLIERS OF NITROGEN FERTILIZERS, WHICH REQUIRE NATURAL GAS AS A FEEDSTOCK, AND PHOSPHATES, WHICH REQUIRE SULFUR—FROM THE REGION’S PETROCHEMICAL INDUSTRY. WITH THE STRAIT CLOSED, THIS CRITICAL ARTERY HAS BEEN SEVERED.
THE TIMING COULD NOT BE MORE CATASTROPHIC. ACROSS THE NORTHERN HEMISPHERE—FROM AMERICA’S BREADBASKET TO EUROPE’S FARMS—MARCH IS THE MONTH FARMERS BUY FERTILIZER FOR SPRING APPLICATION. THE SUPPLY ISN’T JUST DELAYED BUT SIMPLY NOT COMING. US FARMERS ARE FACING A 25% SHORTFALL IN USUAL SUPPLIES.
FERTILIZER ACCOUNTS FOR UP TO 25% OF A FARMER’S PRODUCTION COSTS. WHEN PRICES SURGE—AS THEY HAVE—FARMERS FACE A BRUTAL CHOICE: PAY CRIPPLING PRICES, RATION APPLICATION AND ACCEPT LOWER YIELDS, OR SWITCH TO LESS INPUT-INTENSIVE CROPS. ANY OF THESE PATHS LEAD TO A SMALLER HARVEST. ACCORDING TO THE WORLD BANK: WHEN FERTILIZER PRICES SPIKE, THEY STAY ’HIGHER FOR LONGER,’ AND DOWNSTREAM FOOD INFLATION INEVITABLY FOLLOWS.
THIS IS THE ‘HIDDEN FRONT’ OF THE WAR, AS THE COUNCIL ON FOREIGN RELATIONS TERMS IT—A SLOW-MOTION CRISIS WHERE THE EFFECTS OF TODAY’S SHORTAGES WON’T BE FULLY VISIBLE UNTIL THE HARVEST IS BROUGHT IN MONTHS FROM NOW. WE ARE, IN EFFECT, SOWING THE SEEDS OF NEXT YEAR’S FOOD INFLATION TODAY. BUT THE THREAT DOESN’T END AT THE FARM GATE
U.S.-Iran War Food System Global Food Shortages Fertilizer Shortages Middle East Global Grain Markets Egypt Global Food System Arabs Arab Spring WFP MBSB Research
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