New York / Rome — The Chief Economist of the Food and Agriculture Organization of the United Nations (FAO), Máximo Torero, has warned that the ongoing disruption of the Strait of Hormuz trade corridor is triggering one of the most severe shocks to global commodity flows in recent years, with major implications for food security, agricultural production, and international markets. Tanker traffic through the strait has collapsed by over 90 percent, affecting around 20 million barrels of crude oil per day, one-fifth of global liquefied natural gas (LNG), and up to 30 percent of internationally traded fertilizers.
Torero emphasized that the crisis is not just an energy shock but a systemic threat to global agrifood systems. The Gulf region accounts for nearly half of the world’s sulfur trade, a key input for phosphate fertilizer production, meaning supply disruptions could hinder fertilizer manufacturing in major producing countries. Rising insurance costs for shipping have further complicated the situation, with war-risk premiums spiking from 0.25 percent to as much as 10 percent of vessel value, and normal shipping conditions may take months to resume even after de-escalation.
The disruptions are already pushing up input costs for farmers. Fertilizer prices have surged, with Middle East urea rising 19 percent and Egyptian urea increasing 28 percent in early March. Higher energy prices are expected to sustain these increases, potentially raising global fertilizer costs by 15–20 percent in the first half of 2026. Farmers may reduce fertilizer application or shift to less input-intensive crops, risking disproportionately large declines in crop yields, especially in regions with already low fertilizer use.
The duration of the disruption will determine the scale of the impact. A short-term disruption of up to one month is expected to be manageable, with global food stocks sufficient to stabilize markets within three months. However, a disruption lasting three months or longer could reduce yields for fertilizer-intensive crops like wheat, rice, and maize, encourage crop substitution toward nitrogen-fixing crops, and increase competition for biofuel feedstocks due to higher oil prices.
The effects will vary by country depending on crop cycles and import dependencies. Countries most vulnerable include Sri Lanka, Bangladesh, India, Egypt, and Sudan, as well as fertilizer-dependent regions in Sub-Saharan Africa such as Somalia, Kenya, Tanzania, and Mozambique. Even major exporters like Brazil may face production impacts, which could ripple through global markets. Additional risks include potential declines in remittance income from Gulf economies and the imposition of export restrictions, which could exacerbate price volatility.
Torero called for urgent international coordination to mitigate the crisis. In the short term, alternative trade corridors, emergency financial support, and access to credit for farmers are critical. Medium-term measures should include diversification of fertilizer import sources, strengthening regional reserves, and avoiding export restrictions. Long-term strategies focus on investing in sustainable, input-efficient agriculture, developing alternative fertilizer technologies such as green ammonia, and treating food systems as strategic infrastructure.
