Global food crisis? Not just yet but food inflation is coming as Strait of Hormuz stays closed
Soaring oil and fertilizer prices due to the closure of the Strait of Hormuz are driving up food costs globally, particularly in the U.S., where food inflation reached 7.9% year-over-year in March. While some experts warn of an impending food security crisis, others argue that strong global grain inventories make a full-scale crisis unlikely at this stage. Nonetheless, rising food and energy inflation are expected to disproportionately impact low-income households and could influence political and economic stability.
- ▪The closure of the Strait of Hormuz has disrupted 30% of global urea and ammonia fertilizer shipments.
- ▪U.S. food and beverage inflation rose 7.9% year-over-year in March; urea prices have nearly doubled since February.
- ▪Global grain inventories are strong, with U.S. wheat stocks at 938 million bushels, up 10% from last year.
- ▪The UN warns of potential food security crises, especially for poor populations, due to fertilizer shortages.
- ▪Unlike the 1970s, current agricultural policies maintain higher stock-to-disappearance ratios, reducing the risk of severe shortages.
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Open this photo in gallery:Workers spread fertilizer after planting potatoes at Bluff View Farms, in West Jefferson, N.C., on Sunday. Soaring oil and fertilizer prices are pushing up food costs across the U.S. and other countries.Allison Joyce/Getty ImagesShareSave for laterPlease log in to bookmark this story.Log InCreate Free AccountThe alarm bells are sounding. A food disaster is coming. Oil, natural gas and fertilizer prices have climbed to painful levels since Iran shut the Strait of Hormuz in early March in response to U.S. and Israeli attacks. Acute hunger seems inevitable. Important food officials say so.
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