Food Crisis and Related Risk Factors

Key takeawaysFertilizer and energy, not food, are the core shocks. The Hormuz closure is disrupting energy and fertilizer shipments and driving up prices, but grain markets remain stable. Classic food price‑spike conditions are absent. Strong demand, tight stocks, weak dollar, and weather shocks aren’t aligning as in past crises. Food prices likely won’t surge soon. Ample global stocks and favorable crop conditions limit the risk of broad commodity price spikes. Agricultural commodity prices have been under sustained downward pressure s

Key takeaways

•Shipping restrictions in the Strait of Hormuz have already driven sharp increases in fertilizer and energy prices.
•Higher prices could reduce fertilizer use and lower crop yields if the disruption persists, posing significant food security risks.
•Most vulnerable are countries heavily dependent on Persian Gulf fertilizer and natural gas—especially in Africa and South Asia.

The FAO Food Price Index rose in February for the first time in five months, driven by increasing cereal, meat, and vegetable oil prices. Despite the increase, however, the Index remains nearly 35 percent below the record high reached in March 2022.The Cereal Price Index rose slightly more than 1 percent in February but remained 3.5 percent below its February 2025 level. Wheat prices increased due to concerns about cold weather in Europe and the United States, as well as transportation disruptions in Russia and the Black Sea region.

The attack on Iran by U.S. and Israeli forces and Iranian retaliation against U.S. allies in the Persian Gulf have roiled energy markets by disrupting shipping through the Strait of Hormuz—the Gulf’s only sea passage to the open ocean. About 27% of the world’s oil exports, 20% of global liquified natural gas (LNG) exports, and 20%-30% of global fertilizer exports, including urea, ammonia, phosphates, and sulfur, pass through the Strait.

7.5 million Pakistanis are currently facing high levels of acute food insecurity, according to a new IPC alert released this week.   Pakistan suffered from multiple climate shocks in 2025, including a monsoon-driven flooding and prolonged drought.