FT: war in the Middle East could lead to a food crisis that exceeds 2022 levels

The conflict in the Middle East threatens a global food crisis that could surpass the consequences of Russia's invasion of Ukraine in 2022. The reason is disruptions in fertiliser production and gas shortages that threaten crops around the world. This writes the Financial Times, citing the opinion of experts.

It is pointed out that the Iranian attacks knocked out a significant part of urea production - the most common nitrogen fertiliser. At the same time, gas shortages have forced plants in South Asia to reduce fertiliser output. Of the 2.1 million tonnes of urea intended for export in the past two weeks, about half has not been shipped, according to Kpler. More than 1.1 million tonnes of fertiliser and raw materials, including 570,000 tonnes of urea, are stuck in the Persian Gulf either at the loading stage or already on ships.

Nitrogen fertiliser is made from ammonia using natural gas, the price of which has risen sharply since the war began last month. The shortage coincided with the planting season in the northern hemisphere, raising the risk that rice and other staple crops could fall, the publication said.

Veronica Nye, senior economist at The Fertiliser Institute, warns: 'If the disruptions continue, the situation will be much worse than in 2022. The longer the conflict lasts, the worse the situation will become."

The Middle East is a key hub for global fertiliser and energy supplies. About a third of the world's urea exports and 45 per cent of sulphur exports pass through the Strait of Hormuz. The closure of this route makes supply more difficult. Qatar's QAFCO, for example, shut down its 5.6 million tonnes per annum urea plant after disruptions to liquefied natural gas supplies at QatarEnergy facilities.

India ordered plants to cut gas consumption to 70 per cent of normal, while Pakistan and Bangladesh halted urea production. One of the largest producers in Pakistan, Agritech Limited, has also suspended operations.

Unlike the 2022 crisis, when the problems mainly concerned Ukrainian grain and energy, the current disruptions affect several parts of the food system at once. The global urea market is about 196 million tonnes per year, of which only 57 million tonnes are traded internationally.

Experts note that South Asia is particularly vulnerable: India, Bangladesh and Pakistan depend on LNG imports from the Gulf for fertiliser production. Pakistan is almost entirely dependent on LNG supplies from Qatar and the UAE, with Qatar providing more than 40 per cent of LNG imports for India and two-thirds for Bangladesh. All of India's 32 ammonia plants are fuelled by natural gas.

Rising fuel and electricity prices have already increased transport, processing and cooking costs. Raj Patel of the Lyndon B. Johnson School of Public Affairs warns. Johnson warns, "Hunger will undoubtedly intensify this year."

Alzbeta Klein, executive director of the International Fertiliser Producers Association, adds: "Some regions, especially those with large numbers of smallholder farmers and subsistence farmers, will be hardest hit - these are areas in Africa and South Asia. Countries that depend on imported fertiliser are vulnerable to supply disruptions and price increases, and these problems could spread far beyond the region."