Fertiliser crunch from Iran war threatens global food supply, poorest nations most at risk: Yara chief

The disruption of fertiliser supplies and key raw materials caused by the US-Israel war on Iran could put as many as 10 billion meals a week at risk globally, with the poorest nations bearing the brunt, according to the head of one of the world's largest fertiliser companies.

Svein Tore Holsether, chief executive of Yara, told the BBC that the conflict, which has effectively halted shipping through the Strait of Hormuz, is now threatening food production on a global scale.

He warned that declining crop yields resulting from reduced fertiliser availability could trigger a worldwide bidding war for food.

Holsether urged European governments to carefully weigh the consequences of such a price war on the most vulnerable populations in developing countries.

"We're up to half a million tons of nitrogen fertiliser not being produced in the world right now because of the situation we are in," Holsether said, adding that the shortfall could translate to up to 10 billion fewer meals produced each week.

He said withholding nitrogen fertiliser could slash yields for certain crops by as much as 50% within a single growing season.

"The fertiliser market is very global, so these parts are moving across the planet, but the main destinations would be Asia, South East Asia, Africa and Latin America, where you would see the most immediate impact from this," he said.

Regions already suffering from chronic under-fertilisation, particularly parts of sub-Saharan Africa, could face even steeper declines in agricultural output, with "significant drops" in yields possible, he added.

Planting seasons differ across the globe.

Analysts say the effects of fertiliser shortages in Asia will not show up in food prices until late in the year, when spring-planted harvests come in below expectations or fail to materialise altogether.

Prof Paul Teng, a senior fellow in food security based in Singapore, said some countries may have adequate fertiliser stocks for the current planting season but warned that a prolonged crisis could begin, affecting staple crops such as rice in the months ahead.

Yara boss Holsether said farmers worldwide are grappling with a mounting series of pressures, as the prices they receive for their produce have not kept pace with their rising input costs.

He added, "They're faced with higher energy costs, diesel for a tractor is increasing, other inputs for the farmers are increasing, fertiliser cost is increasing, but yet the crop prices haven't increased to the same extent yet.

Bidding war

According to the United Nations, roughly one-third of the world's fertilisers, including urea, potash, ammonia and phosphates, ordinarily transit through the Strait of Hormuz.

Fertiliser prices have surged by 80% since the outbreak of the US-Israeli war on Iran.

Should the conflict persist, it could set off a food bidding war between wealthier and poorer nations, Holsether warned.

"If there's a bidding war on food and one that Europe is robust enough to handle, what we need to keep in mind in Europe is, OK, in that situation, who are we buying the food away from?

"That is a situation where the most vulnerable people pay the highest price for this in developing nations, where they cannot afford to follow that."

Such a scenario would have serious consequences for food affordability, scarcity and hunger, the Yara chief added.

The UN World Food Programme has warned that the combined fallout from the Middle East conflict could push an additional 45 million people into acute hunger in 2026. 

In Asia and the Pacific, food insecurity is projected to rise by 24%, the largest relative increase of any region.