FAO warns of Hormuz food shock

The U.N. Food and Agriculture Organization said on May 20 that a closure of the Strait of Hormuz could set off a global food-price crisis within six to 12 months, turning a shipping disruption into what it called a “systemic agrifood shock.” The agency tied the risk to higher energy costs, tighter fertilizer supplies, and more expensive transport across farm supply chains. FAO Chief Economist Máximo Torero said decisions being taken now on fertilizer use, imports and crop choices would determine how severe the hit becomes. The warning comes as shipping disruptions in the Gulf and Red Sea are already forcing longer voyages and higher insurance bills. ### Why would a Gulf shipping disruption show up in grocery prices months later? The Strait of Hormuz handles far more than crude oil. FAO said the corridor normally carries around 20 million barrels of oil a day, about one-fifth of global liquefied natural gas trade, and up to 30% of internationally traded fertilizers. Torero said the result is not just an energy shock but a chain reaction through fertilizer, transport and food production. (fao.org) March and April already showed some of that transmission. FAO said Middle East granular urea prices rose 19% in the first week of March and Egyptian urea prices jumped 28%, while its food price index rose for a third straight month in April, driven by high energy costs and disruptions linked to the Middle East conflict. FAO said fertilizer prices could average 15% to 20% higher in the first half of 2026 if the crisis persists. (fao.org) ### Why are fertilizers such a critical pressure point? Qu Dongyu, FAO’s director-general, said on May 7 that fertilizer scarcity tied to Hormuz disruption would cut yields and tighten food supplies in the second half of 2026 and into 2027. He said agriculture runs on a crop calendar that cannot be postponed, meaning missed fertilizer applications cannot simply be made up later. (fao.org) FAO also said the Gulf region accounts for nearly half of global sulfur trade, a key input for producing phosphate fertilizers. Torero said farmers facing higher fertilizer and fuel costs are likely to reduce application rates or switch to less input-intensive crops, a move that would lower yields and push the shock into later harvests rather than only current prices. (fao.org) ### What are shipping companies doing now? Shipping disruptions are already changing routes. Trade and shipping coverage cited by the editor’s briefing said carriers have been rerouting around Africa’s southern cape as risks in Hormuz and the Red Sea raised delays, fuel use and insurance costs. FAO separately said alternative land and sea corridors may help, but warned they have limited capacity. (fao.org) War-risk insurance has also surged. FAO said premiums rose from 0.25% to as high as 10% of vessel value after high-risk zones were expanded in early March, with coverage resetting every seven days. Torero said even if tensions ease, normal shipping conditions may take months to return. (marineinsight.com) ### How does this spill into medicines and medical supplies? A U.S. drug-supply assessment published by PharmExec on April 22 said chokepoints, airfreight disruption, Red Sea rerouting and Hormuz-driven fuel and petrochemical inflation were exposing structural weaknesses in the American pharmaceutical supply chain. The report, based on the U.S. Pharmacopeia’s vulnerable medicines list, said 48% of the 100 most vulnerable drugs had at least one key starting material produced exclusively in a single country. (fao.org) A separate PharmExec report on April 7 said global air-cargo capacity had dropped 22% since the conflict began and that tighter conditions at Gulf hubs were delaying biologics, active ingredients, excipients and packaging. USP told the publication that Hormuz was less likely to block drug shipments directly than to raise petroleum-derived input costs across the system. (pharmexec.com) ### What does FAO want governments and companies to do next? FAO said the immediate response should include securing alternative corridors, avoiding export restrictions, protecting humanitarian food flows and building buffers to absorb higher transport costs. David Laborde, director of FAO’s Agrifood Economics Division, said rerouting via the eastern Arabian Peninsula, western Saudi Arabia and the Red Sea could soften the shock, though not remove it. (pharmexec.com) The next test will come in the 2026 planting and fertilization cycle. FAO said choices made now by governments, international financial institutions, the private sector and farmers will shape harvests in the second half of 2026 and food supplies into 2027. (fao.org)