Category: MIL-OSI

Source: United Nations (video statements)

Food and Agriculture Organization (FAO) Chief Economist Maximo Torero briefed reporters on the conflict in the Middle East and the implications for food security.

Speaking to reporters via video link, Torero said that the escalating conflict and the closure of the Hormuz translate directly into higher costs for farmers, adding that fertilizer prices have already risen sharply.

He took Middle East granular urea as example which climbed 19 percent in the first week of March, reach 590 US dollars per ton. Egyptian urea for example, is by 28 percent, he said.

The FAO economist continued, “because natural gas is a primary element to provide nitrogen fertilizers, this could also lead to a significant increase between 50 to 20 percent higher in the first half of 2026,” adding that this mean the farmers are facing “double choke.” He explained, “they have more expensive fertilizers alongside rising fuel costs, which are being used across the value chain to be able to produce the commodity that you eat in the market around.”

Torero also said, “now, what will happen? Of course, this will be affecting mostly the next season if this continues. And it will affect the yields, of course. And the effect of the yields is non-linear. If you use little the impacts are higher because the soils don’t contain the micronutrients. If you use a lot, the impacts will be lower.”

The chief economist said, “the medium-term scenario of a three-month blockade will affect all farmers globally, and then we will have different elements that could impact mostly in the next season. This is reduced yields.”

“And this will happen for the bigger exporters like the US, like Brazil, Argentina, Australia. But also it opens a new competition of demand, which will be the biofuel competition as they all go over $100,” he added.

Torero cautioned that this will activate competition of the month from the biofuel sector, though it will be good news for farmers, it will “be bad for consumers because prices will increase.”

The chief economist also said, “in the short term, in this month period, we need to focus on where priorities are and the priorities are defined by when the crop calendar touches and when you need to apply those fertilizers in soils.”

He further explained, “In this respect, the priority countries right now are Sri Lanka. Because this maha rice harvest is happening right now, Bangladesh, the boro rice season is also happening right now. India, luckily, the domestic fertilizer plant, which was operating at 60 percent has reopened two days ago. Egypt is a great consumer of wheat, so it’s a huge importer. And also it’s vulnerable in the short term. Sudan is also vulnerable and is facing a significant level of acute food insecurity today. In sub-Saharan Africa, the countries like Somalia, Kenya and Tanzania and Mozambique, they depend between 22 to 31 percent of fertilizer inputs. And in the case of the big exporters like Brazil, Argentina and the US, around one fifth or less of their imports of fertilizers comes from this region. But that means that this will be affecting the next planting season. But remember, these are the key exporters in the world.”

Torero also said, “we need to look at the other side of the story, which is the impacts of the countries in the region, which is Iran, where prices were already going up before the conflict. Now they are being exacerbated.”

He continued, “although Iran is not a food import dependent country, they produce 70 or a little bit more of what they consume, but they import the difference. But the costs and the prices are already skyrocketing because of the problems.”

The chief economist added, “the countries in the Gulf, Qatar, Dubai, etcetera are huge importers of food. And those are countries are which will be facing challenges because there is no vessels going into the location.”

“Remittances also will be impacted in the Gulf economies are a host of millions of migrant workers from South Asia and East Africa,” Torero said, adding that if this conflict continues to reduce their capacity to send money to their home countries, “this will affect significant amount of countries, which in some cases big number have significant share of the GDP is because of remittances.”

The chief economist advised that in the very short term – this month before things change substantially – “we need to find any other alternative of corridors, and we are working together with the UN on trying to do that.”

He continued, “we need to provide emergency balance of payments support to import dependent nations before planting windows. So these priority nations and we need to be very selective by avoiding distortion,” adding that “finance farmers to avoid liquidity constraints that will compromise planting these issues.

https://www.youtube.com/watch?v=rNZdXxmnK8Q

Source: United Nations (video statements)

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