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Why is the Middle East war driving global food prices higher for the second consecutive month?

Why is the Middle East war driving global food prices higher for the second consecutive month?

The United Nations Food and Agriculture Organization (FAO) has recorded a second consecutive month of rising global food prices. The primary driver is the Middle East conflict, which is pushing up energy and fertilizer costs, threatening future harvests.
The latest FAO index shows that prices for a basket of food commodities are running approximately 1% above the same period last year. Geopolitical tensions are increasing production and transport costs, once again applying pressure to global food markets.
"The main problem we are facing now is the impact of the conflict on energy and fertilizers — effectively, the cost of producing the next harvest, not the food we have today, but the food we will need tomorrow and the day after," said David Georges Robert Laborde, director of FAO's Agrifood Economics Division.
The expert issued a particular warning about the Strait of Hormuz: up to a third of globally traded fertilizers and around 20% of the world's natural gas — itself a key input for fertilizer production — pass through it. A prolonged closure of the strait would force farmers to cut back on planting or use less fertilizer, ultimately reducing yields and triggering another round of food price increases.
At the same time, Laborde noted that the current price rises are considerably smaller than those seen after Russia's full-scale invasion of Ukraine in 2022. The reason lies in strong harvests in the United States and Asia and high inventory levels built up before the crisis.
"Before the crisis, we were expecting commodity prices to fall because of very good harvests and high stock levels. That is why the crisis is not causing a sharp price spike now, unlike in 2022 when the war in Ukraine began," he explained.
Nevertheless, uncertainty remains — particularly around fertilizer costs and the potential impact of El Niño, which could trigger widespread drought in key agricultural regions.

 

Why is the Middle East war driving global food prices higher for the second consecutive month?

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