The ongoing war has paralyzed the movement of ships in the Strait of Hormuz, in the far north of Iran, causing oil prices to rise. This is also disrupting the supply chain for pharmaceuticals from India, semiconductors and batteries from Asia.
A third of the nutrients used in agriculture, such as fertilizers, pass through this strait. This could reduce supplies to key importers around the world just as farmers in the northern hemisphere prepare to plant crops, observers say. A boost to food prices. (Farmers from Srinagar, Kashmir, to Saskatchewan, Canada, depend on fertilizers and diesel transported across the Strait of Hormuz.)
Jorge Enrique Bedoya, president of the Society of Farmers of Colombia (SAC), explained that “if in agricultural crops, fertilizers represent between 17% and 33% of the total cost of production, then an increase has a direct impact on the cost of producing food.”
QatarEnergy already had to stop production at the world’s largest urea plant, having lost its source of natural gas as raw material after Iranian attacks on its liquefied natural gas facilities.
STRANDED VESSELS
With the war ongoing and the Strait of Hormuz operating at minimum capacity, cargo ships are stranded in the Gulf or making a much longer journey around the southern tip of Africa and planes carrying air cargo from the Middle East are grounded.
The longer the war continues, the greater the likelihood of shortages and price increases. “This is causing major impacts on the global supply chain,” said Patrick Penfield, professor of supply chain practices at Syracuse University.
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