Hormuz Disruption Could Strain Global Food Chains -- FAO Economist

By Wan Muhammad Aslah Wan Razali

KUALA LUMPUR, April 27 (Bernama) -- A prolonged disruption in the Strait of Hormuz could trigger a global food supply crunch, as the United Nations (UN) Food and Agriculture Organisation (FAO) Chief Economist Maximo Torero Cullen warned of mounting risks to crop cycles and rising supply chain costs.

He said the situation was becoming increasingly critical as it coincided with key stages of the global crop calendar, warning that pressure would intensify if the disruption persisted for several more months.

Speaking in an online interview on Bernama World on Bernama TV, Torero Cullen said disruptions in the strait were already driving up costs across global supply chains, noting that Gulf countries import between 55 and 80 per cent of their food.

He said higher input costs, coupled with relatively low commodity prices, were squeezing farmers’ profit margins, forcing them to make difficult decisions such as using fewer inputs, planting less land, delaying planting, or switching crops from wheat and maize to soybeans.

“What we observe is that as the prices of inputs go up while prices of commodities remain low, the margins for the farmers are very low and therefore they have to make tough decisions.

“And those decisions are to plant with less inputs and therefore have lower yields, reduce the area planted, or not plant at all, or to switch to other commodities,” he said, adding that such shifts would reduce production and food availability in the coming seasons.

Torero Cullen said prices of key commodities such as wheat and soybeans were already rising, signalling growing uncertainty that could lead to lower production and tighter global supplies in the second half of the year and into 2027, fuelling food inflation and weighing on economic growth worldwide.

Meanwhile, he said markets could absorb the shock within four to five months if the Strait of Hormuz reopened soon and shipping resumed, limiting the overall fallout.

“So let’s assume that the Strait of Hormuz opens tomorrow, and the vessels start to move. This will imply that in four to five months, the markets will be able to absorb the shock,” he said.

However, he warned that a disruption lasting beyond two or three months would significantly raise the risk of lower global production and tighter food supplies next year.

“That will mean that we will have lower yields and lower supplies across the world,” he said.

On urgent measures, Torero Cullen called for alternative shipping routes, stronger market monitoring to improve supply transparency, and the avoidance of export restrictions that could worsen shortages.

He also urged governments to strengthen targeted social protection for vulnerable groups and ensure humanitarian operations have sufficient logistical support to reach populations facing food insecurity.

For the longer term, he said countries should diversify transport infrastructure and build more resilient food systems to reduce reliance on major maritime chokepoints such as the Strait of Hormuz.

-- BERNAMA