global food price shock looms. Who will be hit?

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…