|
|
|
You can get e-magazine links on WhatsApp. Click here
|
|
|
|
|
|
Protracted Strait of Hormuz crisis could turn into global agrifood catastrophe: FAO
|
|
Monday, 20 April, 2026, 08 : 00 AM [IST]
|
|
Rome, Italy
|
Ships carrying critical agricultural inputs must start moving through the Strait of Hormuz as soon as possible to ward off the risks of a dangerous spike in food price inflation later this year that could trigger a cascade of effects similar to the aftermath of the Covid-19 pandemic crisis, according to the Food and Agriculture Organization of the United Nations (FAO).
“The clock is ticking,” and crop calendars put poorer countries most at risk of scarce and pricey fertiliser and energy inputs, FAO chief economist, Maximo Torero said in a wide-ranging podcast published with David Laborde, director of FAO’s Agrifood Economics Division.
“The last thing we want is lower crop yields and higher commodity prices and food inflation for the next year,” Torero said, noting that would likely force countries to put policies in place to lower domestic food prices, triggering higher interest rates and as a result potential slower economic growth around the world.
The latest FAO Food Price Index covered the month of March and was relatively stable thanks to ample supplies of most food commodities, especially cereals. But pressure is rising in April and will intensify in May as “farmers will make decisions” on whether to switch planting choices to adapt to fertiliser availability as well as whether to allocate more land and resources to biofuels to benefit from higher oil prices but curtailing global food supplies.
“We are in an input crisis; we don’t want to make it a catastrophe. The difference depends on the actions we take,” said Laborde.
FAO urged all countries to closely ponder biofuel mandates and above all to avoid export restrictions on energy and fertilisers.
If the standoff in the Strait of Hormuz is not quickly ended, anticipatory actions should be considered, in particular asking multilateral institutions to provide financing to countries at risk of losing access to basic fertiliser inputs given their planting has started. The International Monetary Fund’s balance of payment facilities, and the Food Shock Window, following the Food Import Financing Facility FAO’s suggested in 2022, could be used as an input-financing facility allowing countries that need fertilisers to get them quickly without triggering distorting subsidy competitions, Torero said.
FAO has already developed a crop calendar-based prioritisation of countries based on when and how much fertiliser they need.
“The risks are very clear. If we don’t accelerate, the risks will exacerbate,” concluded Torero.
|
|
|
|
|
|
|
|
|
|