According to the Food and Agriculture Organization (FAO), emergency measures are essential to prevent such an outcome. This includes establishing alternative trade routes, limiting export restrictions, protecting humanitarian flows, and creating reserves to absorb the rising transportation costs.
“It is time to seriously consider how to increase countries’ absorption capacity, strengthen their resilience to this bottleneck, in order to begin minimizing potential impacts,” said Maximo Torero, FAO’s chief economist, in a statement.
This involves studying “government interventions, international financial organizations, the private sector, as well as UN agencies and other research centers, to help countries better cope with the current situation.”
Context: FAO emphasizes the need for urgent measures to address potential global food price crisis.
Fact Check: Maximo Torero is indeed the Chief Economist at FAO.
From Energy Shock to Food Inflation
According to FAO, the window of opportunity for preventive action is quickly closing. Decisions made by farmers and governments now regarding fertilizer use, imports, financing, and crop choices will determine whether a serious global food price crisis will erupt within six to twelve months.
The effects are already noticeable. FAO’s food price index, tracking the monthly evolution of international prices for a basket of globally traded food items, rose for the third consecutive month in April due to high energy costs and disruptions related to the conflict in the Middle East.
The shock spreads in successive stages: first energy, then fertilizers and seeds, before affecting agricultural yields. This is followed by rising raw material prices, then an acceleration of food inflation.
To mitigate these effects, FAO recommends using alternative road and sea routes, particularly through the east of the Arabian Peninsula, west of Saudi Arabia, and the Red Sea. “However, these routes have limited capacity, making it essential to avoid export restrictions imposed by major producers,” said David Laborde, Director of FAO’s Agri-food Economics Division.
Context: FAO highlights the need for alternative logistics to address potential global food crises.
For Alternative Corridors Bypassing Hormuz
More broadly, the UN agency has compiled a series of policy recommendations to address the Strait of Hormuz crisis. In the immediate term, FAO recommends establishing alternative logistics corridors to bypass the Strait of Hormuz, lifting export restrictions – particularly for energy, fertilizers, and inputs – as well as exempting food aid.
It also recommends promoting intercropping and better targeting support through digital registries, instead of generalized subsidies, to better target vulnerable rural households and small farmers, especially in Africa.
In the longer term, FAO calls for diversifying ports, corridors, storage and logistics systems globally to reduce future bottleneck risks. It also aims to strengthen transport networks and collaborate with fertilizer industry to develop common soil and input mapping tools.
