A global food price shock looms as Middle East war rages on. Here's who will be hit hardest

CNBC reports that the Middle East conflict has disrupted trade through the Strait of Hormuz and that the impact could ripple far beyond energy markets, risking a spike in global food prices.

“The Middle East conflict has disrupted trade through the Strait of Hormuz and its impact could ripple far beyond the energy markets, risking a spike in global food prices”

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The strait is a key artery for oil and gas shipments and for fertilizers critical to global agriculture, and analysts told CNBC that disruptions could feed through to higher farming costs, reduced crop yields and ultimately more expensive food.

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"Higher energy and input costs risk reigniting global food inflation just as retail food prices had returned to more historical levels in many countries," according to the International Food Policy Research Institute (IFPRI).

Analysts warn the first region to feel the impact will be countries closest to the conflict, particularly Gulf states that rely on maritime imports through the Strait of Hormuz.

"Regionally, consumers in the GCC are most exposed to short-term food price spikes due to their heavy reliance on maritime imports transiting the Strait of Hormuz," said Bin Hui Ong, commodities analyst at BMI.

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Persian Gulf economies such as Qatar, Bahrain, Kuwait and Saudi Arabia depend heavily on food imports shipped through the strait and would need to reroute supplies at far higher cost if shipping remains constrained; wealthier states can import by air or overland but poorer neighbours may struggle.

"When it comes to short term shortages, all countries around the Persian gulf west of Hormuz will struggle to get food imports in," Rabobank's Mera said, adding that "Iraq may suffer. Iran itself will also face scarcity."

Beyond the Gulf, analysts identify Sub-Saharan Africa and parts of South and Southeast Asia as most vulnerable because of heavy dependence on imported fertilizer and high household food spending.

“The Middle East conflict has disrupted trade through the Strait of Hormuz and its impact could ripple far beyond the energy markets, risking a spike in global food prices”

CNBC

Raj Patel, a research professor at the University of Texas, said "The short answer is: significant, and faster than people think," and warned that the Strait of Hormuz is a fertilizer chokepoint where Qatar, Saudi Arabia, Oman, and Iran together supply a substantial share of the world's traded urea and phosphates that virtually all transit Hormuz.

Data from the University of Texas at Austin shows that over 90% of the fertilizer consumed in sub-Saharan Africa is imported, and experts noted nitrogen-intensive crops such as maize are especially sensitive to fertilizer shortages.

Rabobank's Mera said "the poorest and most densely populated regions are likely to suffer the most," and singled out Indonesia and Bangladesh among those in South and Southeast Asia likely to be worst affected.

Major agricultural exporters and the global food supply chain could also face disruption: Brazil imports around 85% of its fertilizer, making soybean and maize production highly dependent on global supplies, and a prolonged disruption during Brazil's key fertilizer import season could ripple through global crop markets.

Experts warned that even if crop output remains stable in the near term, rising energy costs alone could drive food inflation higher because energy figures prominently across the food supply chain.

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"The bigger impact on consumer prices will not be the impact on agricultural commodities but the fact that energy is a big portion of the total retail food bill," said Joseph Glauber, senior research fellow at IFPRI,

Chris Barrett, an agricultural economist at Cornell University, said the scale of any price shock "will depend heavily on how long shipping disruptions persist."