Blockade of the Strait of Hormuz threatens a systemic shock to the food market

The prolonged halt to shipping through the Strait of Hormuz, which is restricting the transportation of oil and fertilizers, could trigger the most severe systemic shock to the global food market in recent years. Farmers around the world are already facing rising costs as tanker traffic through this key artery has dropped by more than 90%.

This is reported by FruchtPortal.de.

The chief economist of the Food and Agriculture Organization of the United Nations (FAO), Maximo Torero, stressed that the situation goes beyond an energy crisis. Currently, world food supplies are sufficient, but they will begin to decline rapidly if disruptions in the strait last three months or longer. Since the start of the war in Iran at the end of February, only a few ships have been able to pass this route.

“This is not just an energy shock. If disruptions in the Strait of Hormuz last three months or more, the situation with supplies will change,” Maximo Torero noted.

The situation is complicated by the fact that the strait is critically important not only for oil exports, but also for the supply of mineral fertilizers. Although Iran’s mission to the UN has stated that “hostile” vessels can pass through the strait with the consent of the country’s authorities, actual transport traffic remains almost paralyzed. This creates additional pressure on the cost of agricultural products due to the shortage of resources for sowing and caring for plantations.

“Farmers around the world are already seeing higher costs, as tanker traffic through this important waterway has decreased by more than 90%,” the report says.

Tags: food security, food, Hormuz