A new S&P Global Institute report warns that the combined impact of ongoing geopolitical conflicts and a powerful El Niño event poses a severe risk for a global "food shock." The energy crisis triggered by the Iran war has already pushed fuel prices up, creating affordability issues from New Delhi to New York. Now, hopes of a swift conflict end have been dashed by increased Houthi rebel attacks on Saudi energy facilities. The report highlights that global food producers rely on steady natural gas, sulphur, and diesel supplies, alongside open sea-lanes.
With almost a third of global urea trade passing through the strategic Strait of Hormuz, any disruption to these routes threatens fertilizer availability. Compounding this, El Niño increases weather-related risks to crop yields. The analysis underscores that conflict is testing all these supply chains simultaneously, raising the specter of a dual crisis impacting both energy and food security worldwide.
Source: Financial Times Companies · Summarized by HeadlinesBriefing