FAO: Gulf Conflict Impacting Global Food and Energy Supply Chains

On the 16th local time, the Food and Agriculture Organization of the United Nations warned in its latest report that the regional turmoil sparked by attacks on Iran by the United States and Israel has begun to impact the global energy, fertilizer, and agricultural supply chain, and may further drive up food production costs. The report pointed out that the current conflict in the Persian Gulf has had a significant impact on the global energy, fertilizer, and agricultural food systems. Specifically, as nitrogen fertilizer production heavily relies on natural gas as a raw material, the rise in energy prices due to the blockade of the Strait of Hormuz has further increased production costs. If the current conflict persists, global fertilizer prices in the first half of this year could potentially increase on average by 15% to 20%. The report also noted that the rise in energy prices is also raising the costs of the entire agricultural supply chain. Beyond impacting the commodities market, this conflict could also bring broader economic repercussions.