Escalating conflict in the Middle East is driving up energy and agriculture costs, a shock that could ripple through global food markets in the months ahead, the UN Food and Agriculture Organization (FAO)'s chief economist Maximo Torero warned.
Global food commodity prices climbed for a second consecutive month in March, driven mainly by higher energy costs linked to escalating conflict in the Middle East, the FAO said in a report released on Friday.
The FAO Food Price Index, which tracks monthly changes in the international prices of a basket of globally traded food commodities, averaged 128.5 points in March, up 2.4 percent from February and 1.0 percent above its level a year ago.
The report said ample global food supply has so far curbed price increases, but warned that persistently high energy costs would keep upward pressure on markets. It added that the Middle East, as a key transit route for energy and fertilizer raw materials, could further drive up agricultural production costs if supply is disrupted or transport expenses rise.
"Everything will depend on the duration of the conflict. Why? Because through this trade, we have between 35 percent of the oil, between 20 to 30 percent of the fertilizers and 25 percent of natural gas. And also we have 45 percent of sulfur. Sulfur is used to create phosphates, which are an important input for fertilizers too. So this is impacting the the farmers," Torero said in an interview with China Central Television (CCTV).
Torero said agricultural input costs have already surged due to escalating tensions in the Middle East, rising far faster than grain prices. He warned that farmers may cut spending or alter planting patterns, changes that would not cause immediate shortages but could gradually reduce output and strain food markets in the coming quarters.
"In the case of the consumers, who will be the most affected? The food import-dependent countries, because they will have to pay if the prices of food grow next year, at the end of this year, and that will be affecting the most vulnerable people or the most dependent people," he said.
FAO said the outlook will depend on how long the Middle East conflict lasts, warning that prolonged disruption could push up farm costs and global food prices. Import-dependent nations would bear the brunt, leaving vulnerable populations exposed to higher bills and greater food insecurity.
FAO warns Middle East conflict driving up agriculture costs, risks global food price rise
FAO warns Middle East conflict driving up agriculture costs, risks global food price rise
