Global food prices have shown only modest increases in the two months since the Iran war began, a surprising calm that belies mounting pressure on agricultural inputs. This stability will not last, according to Matin Qaim, executive director at the University of Bonn's Center for Development Research, who predicts significant rises in the coming months. The critical chokepoint of the Strait of Hormuz, now restricted by Tehran, normally handles a third of the world's seaborne fertilizer and a quarter of its oil, directly impacting production costs.
Despite the ongoing conflict and Iran's restrictions on shipping through the Strait of Hormuz, global food prices registered a relatively modest 2.4% increase last month compared to February, according to the Food and Agriculture Organization (FAO) index. Cereal prices saw an even smaller gain, edging up by 1.5%. These figures stand in stark contrast to the dramatic price spikes seen in 2022, when global food markets wrestled with the combined pressures of Russia's invasion of Ukraine and the lingering effects of the COVID-19 pandemic.
Overall food prices today remain approximately 11% below their 2022 average. This current market calm, however, is deceptive. The math does not add up.
Input costs for agriculture, specifically fuel and fertilizer, have surged worldwide since the conflict began. The discrepancy between rising production costs and relatively stable retail prices stems from a significant lag effect, a point of broad agreement among economists. Most food consumed globally was produced before the war escalated, drawing on existing inventories and pre-purchased inputs.
Sandro Steinbach, an expert in agricultural policy at North Dakota State University, described recent price movements as a "mixed signal, not a clear reason for reassurance." He pointed out that while fertilizer and shipping markets can reprice in days, agriculture operates on biological and seasonal timelines. Here is what they are not telling you: the full cost of the Strait's closure has not yet filtered down to consumers. The Strait of Hormuz is not merely a shipping lane; it is a critical artery for global commerce.
Its closure by Iran, in retaliation for the United States and Israel’s war, cuts off a vital flow of commodities. This narrow passage accounts for approximately one-third of global seaborne fertilizer and one-quarter of seaborne oil. Any sustained disruption here directly translates into higher costs for farmers, who rely heavily on these inputs to maintain yields and feed livestock.
Follow the leverage, not the rhetoric. For vulnerable populations, the consequences could be severe. Matin Qaim of the University of Bonn warned that poor people in Africa and Asia, who already spend a high share of their income on food, will be hurt the most. "Hunger and undernutrition will very likely rise," Qaim stated.
The FAO echoed this concern last week, cautioning that a prolonged crisis in the Strait could lead to a global food "catastrophe." Countries like India, Bangladesh, Sri Lanka, Somalia, Sudan, Tanzania, Kenya, and Egypt face the most immediate risk, according to the organization. The World Food Programme projected last month that nearly 45 million additional people could face acute food shortages if the conflict persists into mid-year and oil prices remain above $100 per barrel. Shouro Dasgupta, a researcher at Fondazione CMCC in Lecce, Italy, highlighted how rising energy costs are already impacting household budgets in low-income countries. "In many low-income countries, fuel prices feed directly into retail food prices, since transport expenditure makes up a far larger share of total households’ expenditure compared to high-income countries," Dasgupta told Al Jazeera.
This means that even before a potential harvest shock, families in cities like Dhaka, Cairo, and Lagos are feeling the squeeze. Faced with rising food prices, these households are often forced to shift away from nutritious options like fruits, vegetables, and protein towards cheaper, calorie-dense staples. Such dietary shifts carry lasting consequences for child nutrition and long-term public health.
Yet, not all analysts share the same level of alarm regarding the severity of the immediate outlook. Elizabeth Robinson, a professor of environmental economics at the London School of Economics, offered a more tempered view. "Grain markets are not being disrupted, and countries are not reacting as they did in 2008," Robinson explained, referring to the widespread export bans that exacerbated the 2007-08 food crisis. That earlier crisis, driven by drought, low grain stocks, and rising oil prices, saw global wheat prices soar more than 135%.
This time, there has been no comparable rush to ban food exports, save for minor restrictions from Iran and Kuwait, neither of which are major global food suppliers. "Therefore, we most likely do not need to be concerned that there will be a drastic surge in food prices in the near future," Robinson concluded. Steve Wiggins, a research fellow at the Overseas Development Institute in London, also suggested that pessimistic forecasts often underestimate market adaptability. He emphasized the diverse and dispersed nature of global farming, which allows farmers to adjust production systems in response to changing input availability and prices.
Wiggins recalled how some analysts during the 2007-08 crisis declared the food system "broken" and predicted cereal prices would never return to normal. "They were, thank goodness, mistaken," he noted, as prices eventually reverted to historically low levels. This resilience, Wiggins argued, provides a buffer against current shocks. However, the longer the Strait of Hormuz remains closed, the more pressure will build on input costs.
Prices for critical fertilizers like urea, ammonia, sulfur, and phosphates are likely to continue their ascent. The FAO has estimated that fertilizer prices could average 20% higher in the first half of 2026 if the crisis persists. Maritime traffic in the Strait has returned to a trickle, following a brief weekend uptick, since Tehran announced restrictions would remain as long as the U.S. blockade of Iranian ports continues.
This ongoing standoff holds the key to the market's trajectory. President Donald Trump indicated in a Monday interview with Bloomberg News that he was unlikely to extend the two-week ceasefire between the U.S. and Iran before its Wednesday expiry. He stated he would not be rushed into a "bad deal." This signals a potential hardening of positions, which could prolong the maritime restrictions.
Kathy Baylis, a food security expert at the University of California, Santa Barbara, who advised the George W. Bush White House, expects April's food price numbers to be worse than March's. She will be monitoring whether planted area for major crops drops this spring, a potential indicator of farmers responding to increased input prices.
Even if planted area holds steady, a reduction in fertilizer use could lead to lower yields. - The Strait of Hormuz closure creates a significant lag between rising input costs and retail food prices. - Poor populations in Africa and Asia face the highest risk of increased hunger and undernutrition. - Despite initial modest price rises, experts anticipate substantial increases in coming months. - Unlike past crises, widespread export bans have largely been avoided, offering some market stability. This situation matters because it directly links geopolitical maneuvering to the dinner tables of millions globally. The Strait of Hormuz is not just an energy corridor; it is a food artery.
Prolonged disruption risks not only economic instability but also a humanitarian crisis, particularly in already vulnerable regions. The choices made in Washington and Tehran today will determine the cost of basic sustenance for families from Dhaka to Cairo tomorrow. All eyes will now be on the looming deadline of the U.S.-Iran ceasefire on Wednesday.
Any decision by President Trump regarding its extension will immediately influence the trajectory of shipping restrictions in the Strait and, consequently, global fertilizer and food prices. Additionally, agricultural markets will closely watch planting decisions and early yield forecasts across major food-producing regions in the coming weeks for signs of reduced input use, which would signal the next phase of price adjustments.
Key Takeaways
— - The Strait of Hormuz closure creates a significant lag between rising input costs and retail food prices.
— - Poor populations in Africa and Asia face the highest risk of increased hunger and undernutrition.
— - Despite initial modest price rises, experts anticipate substantial increases in coming months.
— - Unlike past crises, widespread export bans have largely been avoided, offering some market stability.
Source: Al Jazeera