ICC Chief Warns Hormuz Gridlock Risks Global Food Crisis as Fertilizer Trade Stalls

The secretary-general of the International Chamber of Commerce has warned that the months-long disruption of shipping through the Strait of Hormuz risks triggering a global food crisis, as roughly one-third of the world’s fertilizer shipments pass through the narrow waterway.

John Denton told The Wall Street Journal that available fertilizer capacity had fallen by nearly 40 per cent since the conflict between Iran and the United States disrupted the strait, removing some 2.7 million tons from the market.

If no progress is made in unblocking the strait, Denton estimated, prices of food staples could soar by up to 80 per cent. Developing and emerging economies would feel the shock first — the Philippines, for example, imports about 90 per cent of its fertilizers through the route.

Denton, who sits on a United Nations task force attempting to broker a solution to unblock the strait, said attention had been fixed on rising oil prices while the greater danger built elsewhere. “People see this fundamentally through the prism of the battle between the US and Iran, which is in a way theatrical, it is so overpowering,” he said. “The story which is the killer… is the fertilizer story.”

Earlier ICC-commissioned modelling warned that a severe and sustained disruption could push global cereal prices as much as 81 per cent above 2020 levels, while consumer food prices in East Asia, the Pacific and sub-Saharan Africa could rise by nearly 70 per cent, according to industry reporting. Rising fertilizer costs are already forcing some farmers to reduce application rates, analysts say — an echo of the 2022 price spike triggered by the Russia-Ukraine war.

Sources

• The Wall Street Journal
• World Ports (ICC statement reporting)