ROME, Oct. 15 — Shipping disruptions in the Strait of Hormuz are increasingly affecting global agricultural production, potentially leading to crop yield reductions and further driving up food prices, said Alvaro Lario, President of the International Fund for Agricultural Development (IFAD), on Thursday.
In an interview, Lario said the chain effects of the blockade of the Strait of Hormuz are becoming evident. Factors such as disrupted fertilizer shipments, rising fuel and transportation costs, and the El Niño phenomenon are pushing up costs across every link of the food supply chain.
ROME, Oct. 15 — Shipping disruptions in the Strait of Hormuz are increasingly affecting global agricultural production, potentially leading to crop yield reductions and further driving up food prices, said Alvaro Lario, President of the International Fund for Agricultural Development (IFAD), on Thursday.
In an interview, Lario said the chain effects of the blockade of the Strait of Hormuz are becoming evident. Factors such as disrupted fertilizer shipments, rising fuel and transportation costs, and the El Niño phenomenon are pushing up costs across every link of the food supply chain.
Lario noted that while countries and regions have relied on existing fertilizer and fuel stockpiles to mitigate the impact to some extent, prolonged uncertainty from the conflict could force farmers to adjust their planting structure—abandoning higher-yield crops with longer return cycles in favor of crops that generate income more quickly. In addition, reduced fertilizer use by farmers could lead to lower grain output.
Lario said global agricultural product prices rose 13 percent in the third quarter of this year and are expected to climb further in the fourth quarter of this year and the first quarter of next year. Countries dependent on imported fertilizer, fuel and grain are more vulnerable to the shocks.
The Strait of Hormuz is a vital global shipping channel for energy and fertilizer. Before the outbreak of the Iran conflict at the end of February this year, roughly one-third of the world's urea and nearly half of seaborne sulfur passed through the strait.
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