The UN Food and Agriculture Organization (FAO) warned Monday that a prolonged disruption in the Strait of Hormuz could develop into a global agrifood catastrophe by delaying shipments of critical agricultural inputs, raising food prices and reducing crop yields later this year and into 2027.

FAO said in a statement that vessels carrying fertilizer and energy inputs need to resume moving through the waterway as soon as possible.

FAO Chief Economist Maximo Torero said "the clock is ticking," warning that poorer countries are most exposed because crop calendars leave them vulnerable to shortages and higher costs for fertilizer and energy.

He noted that lower crop yields and higher food inflation next year could push governments to intervene to curb domestic prices, with broader risks for interest rates and global economic growth.

FAO said its latest Food Price Index for March remained relatively stable due to ample supplies of most commodities, especially cereals, but added that pressure is building in April and is expected to intensify in May as farmers decide whether to change planting plans because of fertilizer availability and higher energy prices.

David Laborde, head of FAO’s Agrifood Economics Division, said the world is already in an "input crisis" and warned against allowing it to become a catastrophe.

The agency urged governments to avoid export restrictions on energy and fertilizers and to reassess biofuel mandates, warning that shifting more land and resources to biofuels could tighten food supplies further. It also said multilateral financing tools, including IMF facilities, could be used to help vulnerable countries secure fertilizer quickly without triggering subsidy competition.

FAO said between 20% and 45% of exports of key agrifood inputs rely on sea passage through the Strait of Hormuz.

It added that fertilizer and energy markets are inelastic, meaning prices can rise sharply even with relatively small disruptions in traded volumes, and warned that current risks may exceed those seen in 2022 if compounded by a strong El Nino. (AA)

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