The Food and Agriculture Organization of the United Nations (FAO) has warned that a prolonged disruption in the Strait of Hormuz could escalate into a global agrifood crisis, driven by risks to fertiliser, energy and other key agricultural input supplies.
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PexelsFAO said delays in restoring shipping flows through the strategic route could push up food prices later this year and place additional pressure on global production systems, particularly in countries already vulnerable to input shortages.
Shipping route disruption raises global supply concerns
Ships carrying critical agricultural inputs must start moving through the Strait of Hormuz as soon as possible to ward off the risks of a dangerous spike in food price inflation later this year that could trigger a cascade of effects similar to the aftermath of the Covid-19 pandemic crisis, according to FAO.
“The clock is ticking,” and crop calendars put poorer countries most at risk of scarce and pricey fertilizer and energy inputs, FAO chief economist Maximo Torero said in a wide-ranging podcast published Monday with David Laborde, Director of FAO’s Agrifood Economics Division.
Risk of inflation and slower growth
“The last thing we want is lower crop yields and higher commodity prices and food inflation for the next year,” Torero said, noting that this could force countries to introduce policies to reduce domestic food prices, which may in turn trigger higher interest rates and potentially slower global economic growth.
The latest FAO Food Price Index for March remained relatively stable due to ample supplies of most food commodities, especially cereals. However, pressure is expected to rise in April and intensify in May as farmers make planting decisions based on fertiliser availability and potential shifts toward biofuel production.
“We are in an input crisis; we don’t want to make it a catastrophe,” said Laborde. “The difference depends on the actions we take.”
Policy risks and global coordination concerns
FAO urged countries to carefully consider biofuel mandates and to avoid export restrictions on energy and fertilisers.
If the standoff in the Strait of Hormuz is not quickly resolved, anticipatory measures may be required, including financing support for countries at risk of losing access to fertiliser inputs during the planting season.
Torero noted that multilateral mechanisms such as the International Monetary Fund’s balance of payments facilities and the Food Shock Window, following the Food Import Financing Facility, which the FAO proposed in 2022, could be used to support input financing without distorting subsidy competition.
FAO has also developed a crop calendar-based prioritisation system identifying countries based on timing and fertiliser needs.
“The risks are very clear,” Torero said. “If we don’t accelerate…, the risks will exacerbate.”
Key structural risks to food systems
• Exports of between 20% and 45% of key agrifood inputs rely on sea passage through the Strait of Hormuz
• Lower input use could reduce yields in 2026 and 2027, increasing food commodity prices and retail inflation
• Thin farmer margins increase risk of financial distress, worsening long-term global supply stability
• Export restrictions in past crises intensified global food price spikes
• Fertiliser and energy markets are highly inelastic, meaning prices can rise sharply even with small supply disruptions
Outlook and risk factors
FAO said the situation could escalate quickly if shipping disruptions persist, with markets expected to react strongly to continued uncertainty.
Unlike natural disasters or climate-related stressors such as El Niño, Torero said the Strait of Hormuz disruption is “something governments can resolve and have to resolve.”
The organisation also warned that current risks are higher than in 2022, with conditions that could contribute to a “perfect storm” if combined with a strong El Niño event.
