Simon Jack – BBC Business Editor
The disruption in the supply of fertilizers and their key ingredients, caused by the war in Iran, could cost up to 10 billion meals a week globally and will hit the poorest countries hardest, according to the head of one of the world’s largest fertilizer producers.
Svein Tore Holsether, chief executive of Yara, told the BBC that hostilities in the Gulf – which have blocked shipping traffic through the Strait of Hormuz – are endangering global food production.
The reduction in crop yields, as a result of less use of fertilizers, could trigger a bidding war for food, he warned.
He also urged European nations to carefully consider the impact that a price war would have on the “most vulnerable” in other countries.
Although rich countries like the UK are highly unlikely to face food shortages, the rising costs faced by food producers are expected to begin to be reflected in the weekly shopping basket in the coming months.
“At this moment, up to half a million tons of nitrogen fertilizers have been stopped being produced in the world due to the situation we find ourselves in,” Holsether said.
“What does this mean for food production? I estimate that, as a result of the lack of fertilizers, up to 10 billion servings of food will not be produced each week.”
Less productive crops
Not applying nitrogen fertilizer would reduce the yield of some crops by up to 50% during the first season, Holsether explained.
“The fertilizer market is very global, so these products circulate throughout the planet; however, the main destinations would be Asia, Southeast Asia, Africa and Latin America, regions where the most immediate impact of this situation would be observed,” he noted.
Those parts of the world where there is already insufficient fertilization – as is the case in several countries in sub-Saharan Africa – could experience an even greater impact on their crop yields, he added, noting that “significant declines” could be expected in such areas.
Planting seasons vary depending on the region of the world.
In the United Kingdom they are in full swing with planting, while in Asia farmers are just getting started.
According to analysts, the consequences of fertilizer shortages in Asia will not be reflected in food prices until the end of the year, when the crops that should have been planted this spring will turn out to be lower than expected, or even non-existent.
Professor Paul Teng, a senior food security expert in Singapore, said some countries may have enough fertilizer for the immediate planting season.
“However, if the crisis continues, we will see repercussions on crops such as rice in the coming months,” he warned.
Farmers around the world face a number of daunting challenges, Holsether said, as the prices they can obtain for the food they produce have not yet adjusted to cover the rising costs they face.
“They are faced with higher energy costs; the price of diesel for tractors is rising, as is that of other agricultural inputs and fertilizers, but, despite this, crop prices have not yet increased in the same proportion,” he explained.
bidding war
According to the United Nations, about a third of the world’s fertilizers – such as urea, potash, ammonia and phosphates – normally transit through the Strait of Hormuz.
The price of fertilizers has skyrocketed 80% since the start of the US and Israeli war against Iran.
A continuation of the conflict could trigger a food price war between rich and poor countries, Holsether added.
“If a food price war occurs, and Europe has the capacity to confront it, what we must take into account in Europe is: who are we buying food from in that situation?” he asked.
“In that case, the most vulnerable people in developing countries, who cannot afford that luxury, are the ones who pay the highest price,” he said.
In the UK, the Food and Drink Federation recently forecast that food inflation could reach 10% by December.
This week, the Bank of England said it believes food price inflation could rise to 4.6% in September, and even reach even higher levels later in the year.
The UN World Food Program estimates that the combined repercussions of the conflict in the Middle East could plunge an additional 45 million people into acute hunger by 2026.
In the Asia-Pacific region, food insecurity is projected to increase by 24%, representing the largest relative increase of all regions.
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