Shipping bottlenecks and conflict threaten sharp rise in global food prices
Restrictions at the Hormuz and Bab el-Mandeb straits, combined with Russian-Ukrainian attacks on grain routes, are raising fears of a worldwide food-price surge, especially for vulnerable nations.
Rising fuel costs linked to instability in the Hormuz and Bab el-Mandeb waterways are already squeezing farmers as harvest time begins in the West. At the same time, intensified bombardments by Russia and Ukraine on each other's shipping infrastructure are further tightening the flow of wheat, which they together supply at a quarter of global totals. Climate-related price pressures are adding to the mix, with a UN food-commodity index up 2.5% year-on-year. The chief economist of the UN Food and Agriculture Organization warned that a risk premium is re-emerging in food markets.
Why it matters
Tightened shipping routes and conflict could push food prices higher, threatening food security for the world’s poorest populations.
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