In an interview with Al Jazeera’s “Counting the Cost”, IFPRI Research Fellow Emeritus Joseph Glauber discussed how an escalating conflict involving Iran could reverberate through global food and fertilizer markets—particularly given the region’s critical role in trade flows through the Strait of Hormuz.
Glauber noted that countries within the Gulf are among the most vulnerable, as they rely heavily on imports of staple commodities—including grains, oilseeds, vegetable oils, and sugar—much of which pass through the Strait of Hormuz. Several countries in the region, he emphasized, are already grappling with food shortages and high inflation, with Iran facing particularly elevated food price pressures even before the current crisis.
Beyond immediate food supply concerns, Glauber warned of potential longer-term disruptions in global fertilizer markets. The Gulf region is a major exporter of nitrogen-based fertilizers, phosphate, sulfur, and liquefied natural gas—an important feedstock for fertilizer production. Countries highly dependent on these imports, such as India, are already “scrambling to find supplies elsewhere,” he observed.
While fertilizer prices surged to record highs in 2022, Glauber explained that crop yields remained strong that year due to high commodity prices that helped farmers absorb costs. Today, however, with grain prices much lower, farmers’ profit margins are thinner—raising concerns that sustained fertilizer price increases could lead producers to apply less fertilizer or shift to less input‑intensive crops.
On inflation risks, Glauber highlighted that the energy channel may pose the most immediate pressure. Shipping and transportation costs have already risen, and food systems—highly dependent on fuel for transport, processing, and distribution—are particularly exposed. If oil prices remain above $100 per barrel for an extended period, he cautioned, broader inflationary pressures could build.
How much of this translates into higher food prices will depend on the duration of the conflict. In many developed countries, he noted, the “farm value” share of retail food prices is relatively small—often less than 15 percent—meaning that energy-driven costs beyond the farm gate could have a more significant impact on consumers.
Watch the full episode on YouTube.