FAO warns Hormuz closure has become a critical failure point for global food supply

The closure of the Strait of Hormuz has turned the waterway into a critical failure point for global food security, the chief economist of the UN Food and Agriculture Organization said, warning that disrupted fertilizer shipments threaten farm output through 2027.

Writing for the Council on Foreign Relations on June 3, Maximo Torero Cullen said the strait normally carries up to 30% of internationally traded fertilizers alongside about 25% of seaborne oil and 20% of liquefied natural gas. Since conflict escalated in late February, export volumes through the strait had fallen to less than 5% of pre-conflict levels by mid-March, a drop of more than 95%.

Major producers in Iran, Qatar, Saudi Arabia and the United Arab Emirates have cut or suspended operations, removing a key source of global supply, Torero Cullen said. Unlike oil, fertilizers have no globally coordinated strategic reserves to cushion the shock. Middle East urea prices remain between 75% and 108% above pre-conflict levels, while higher oil and European gas prices have lifted nitrogen production costs worldwide.

FAO modeling suggests cereal producers could face income losses of up to 5% in 2026, with effects lasting through 2030. Growers face three options, he said: cut fertilizer use and accept lower yields, shift toward less nitrogen-hungry crops such as soybeans, or absorb higher costs and risk financial collapse. A broad move into oilseeds could in turn tighten grain supplies and lift food prices for import-dependent countries.

Torero Cullen called for immediate, coordinated action, warning that the window to respond is closing as planting seasons proceed regardless of the conflict.

Source: Council on Foreign Relations