Food shock due to Iran war is inevitable – and it could get worse

global food prices reach your highest level on record after Energy crisis of the 1970sInflation, once triggered by the conflict in the Middle East, has been corrected. Are we headed for a new record – the worst food shock ever – as the prices of fuel, fertilizers and pesticides skyrocket due to the turmoil in Iran?

Faced with rising costs, many farmers are likely to plant less in the coming weeks, leading to shortages later this year and pushing up food prices. This is already happening, but how bad it will get depends on many factors, including how long the war will continue and how much the weather extremes caused by global warming this year have affected crops.

Says, “There is a possibility that this will become a major crisis for poor and hungry people.” matin qaim At the University of Bonn in Germany.

Says, “We are in a terrible storm and there is no easy way out of it.” Tim Benton At the University of Leeds, UK. “Even if everything is resolved tomorrow, it will take some time, as we have found with post-Covid reconstruction.”

After declining for decades after the 1970s peak, global food prices, in real terms, have been rising since the 2000s and are not far off the 1970s records. Climate change is a major factor, with extreme heat, floods and storms affecting yields, sometimes to the extent of causing a global food crisis as was seen in 2010. The COVID-19 pandemic and Russia’s war on Ukraine also led to large increases.

The increased production of biofuels is also driving up food prices, with more than 5 percent of food calories now being converted into fuel rather than eaten. While some governments have acknowledged that food-based biofuels should be phased out, a recent report estimates that 92 percent of biofuels will still be food-based in 2030.

Now, US and Israeli attacks on Iran are causing severe shortages of raw materials critical for food production and distribution. The fuel is clear. Diesel fuel is what powers a lot of farm machinery, as well as the ships and trucks that move food around, so increases in the price of oil ultimately lead to higher prices in supermarkets.

Then there are fertilizers, which are essential to feed the world. “If we completely stopped using mineral fertilizers around the world, we would probably see half the world starving,” Qeum says.

Nitrogen fertilizers produce ammonia by reacting hydrogen with atmospheric nitrogen, with natural gas supplying both the hydrogen and electricity. The ammonia is then usually converted into urea, which is a solid substance that is convenient to transport.

Qatar has become a major fertilizer producer due to its vast natural gas resources. Say, it makes 15 percent of the urea used worldwide anthony ryan At the University of Sheffield, UK, and 50 percent of the urea sold in international markets is used. Now, little of that urea is getting through the Strait of Hormuz, the narrow waterway between Iran and the Arabian Peninsula.

Not only this. Countries such as India, Bangladesh and Pakistan produce most of their own fertilizer, but do so using gas from the Persian Gulf. Now, fertilizer plants in these countries having to close down. With natural gas production facilities in the region damaged by the war, this disruption could last for years. Meanwhile, a major fertilizer plant in Australia also had to be closed Due to an accident.

As a result, nitrogen fertilizer prices have already increased by more than a third and could go even higher, says Qeum. “If fertilizer prices doubled, it could easily lead to a 20 to 30 percent increase in food prices.”

And it’s not just urea. Gulf countries such as Qatar and the United Arab Emirates are also major producers of sulfur fertilizers needed in many regions and sulfuric acid needed to convert mined phosphate into forms that can be used by plants.

Then there are pesticides, which are also important for maintaining global food yields – especially as many pests are spreading and becoming more problematic as the world warms. Pesticide prices are linked to naphtha, a fossil-fuel derivative that is transformed into a vast array of chemicals, including plastics widely used in food packaging.

“So far in March, three global naphtha-export hubs have been hit by drone attacks,” the analyst says. Zid Tijani In Argus Media in the UK. This includes the Ust-Luga port in Russia, which is currently affected by Ukraine, as well as locations in Qatar and the United Arab Emirates.

All of these effects will cause prices of food and many other commodities to rise in the coming months and years. “The number of markets affected by this is staggering,” says jason hill At the University of Minnesota.

The issue isn’t just that farmers will have to pay too much for fuel, fertilizers and pesticides, says Kaim, assuming they can get them at all. The point is that if farmers are not sure they can make a profit, they may plant different crops or not plant them at all. Meanwhile, speculation and profiteering could push prices even higher, he says Jennifer Clapp At the University of Waterloo in Canada.

How bad will it be? Clapp says that the large increases in food prices in the 1970s occurred partly because global food stocks were depleted. For now, food stocks are abundant, but that could change if the conflict drags on, especially if warming-fueled extreme weather also affects yields.

“It has a good chance of getting out of control and causing an equally serious, if not worse, crisis,” says Clapp. “If we have major climate events, it could certainly lead to something more severe.”

“In the end, prices are global prices, and fertilizer prices are rising everywhere, and food prices are rising everywhere. (People who are) on the lower spectrum of the income distribution are the most affected, because they spend a lot more on food. They cannot afford significant increases in food prices,” says Qaum.

What’s more, major cuts in international aid have already taken place, and more are likely to happen. “When food prices rise and there is a greater need for international aid, the availability of money decreases and the price of what it can buy increases,” says Benton.

He says the consequences will include social unrest in the worst-affected countries Paul Behrens At Oxford University. “Whenever we’ve seen food prices go up in the past, you see this volatility.”

How can countries prevent food shocks?

One way to limit the damage. “We’re burning about 15 million loaves of bread every day in Europe for biofuels,” says Behrens. “It’s a crazy way to generate energy.”

Biofuel production is largely driven by subsidies and state mandates, so governments have the power to cut biofuel production and release more food onto the market. “It can definitely help,” says Kyum.

He believes there should be an international agreement to automatically limit biofuel production from foods when food prices get too high, but countries are not doing this unilaterally either. “We haven’t seen this happen in previous crises,” he says.

On the contrary, what is likely to happen instead is that nations will increase biofuel production to limit the rise in fuel prices, says Qeum. This could have a huge additional impact on food prices, among other things.

This has already started happening. America has announced It will increase the proportion of bioethanol in fuel to try to limit price increases, and Australia is also considering this.

The thing is that increasing biofuel production from food will not make much difference to fuel prices, but it will have a big impact on food prices. For example, in the U.S., one-third of the corn is turned into bioethanol, but this bioethanol supplies only a few percent of the gasoline supply, Hill says. “There is a disproportionate impact on food markets.”

“Adding more ethanol to gasoline is a policy from the 1990s that doesn’t help fight air pollution or climate change,” says simon donner at the University of British Columbia in Canada. “Rising oil prices could be an opportunity to help Americans transition to the cleaner and more advanced technology of the future: electric vehicles. Instead, the U.S. government is moving backwards.”

But the rest of the world would not want to go into the same situation again. “This is a huge shock to the system and so, even if things get back to status quo in terms of ship movements and production and so on, the thing on everyone’s mind will be: ‘How do we build a more resilient system?’,” says Hill.

Accelerating the transition to renewable energy, electric vehicles and heat pumps, which are essential for a net-zero transition, will make economies less sensitive to oil price shocks. But in addition, we also need to divest the entire chemical industry from fossil fuels, Ryan says.

For nitrogen fertilizers, this means producing with electricity instead of natural gas. “Sure, you can do no-greenhouse-gas-emissions ammonia,” says Ryan. “The technology is there. We just don’t have enough renewable electricity.”

And with the increasing demand for electricity to power data centers for artificial intelligence, this situation is unlikely to improve soon unless the AI ​​bubble bursts.

In the meantime, much can be done to reduce fertilizer use. In fact, fertilizers are used excessively in many areas, with excess fertilizer flowing into rivers and oceans or turning into nitrous oxide, a highly potent greenhouse gas. Ways to reduce overuse include precision farming techniques, crop rotation with legumes, better use of manure, and breeding plants that use fertilizers more efficiently.

“So it’s a push toward more sustainable farming systems, but sustainable doesn’t equate to organic,” says Qeum. He says that adopting organic farming will lead to a huge increase in prices due to less production and will significantly increase deforestation due to the need for more agricultural land.

“We need a change in the food system,” says Behrens, “and part of that must be a change in diet—for example, getting most of our protein from beans and legumes that create their own fertilizer, rather than from grain-fed meats.” “That makes a huge difference,” he says.