A new phase of food inflation may emerge, with fruit and vegetable prices potentially rising by up to 30 per cent if disruptions linked to Iran and the Strait of Hormuz continue.
While attention remains on oil flows, the fertiliser market is also affected. The Strait of Hormuz is a key route for agricultural inputs, and disruptions are influencing supply chains.
Fertiliser costs are increasing, with the risk of further rises if conditions persist. Higher input costs are affecting farm-level decisions on fertiliser use, which in turn influences crop yields and output.
Lower fertiliser use can reduce productivity, tightening supply while demand remains stable. This leads to higher prices across the supply chain, from wholesale to retail.
Energy costs are also rising. Fertiliser production depends on gas and oil, and increases in energy prices affect production, irrigation, transport, and cold chain operations.
Retailers in Europe are monitoring input costs, with procurement teams assessing the impact on pricing. Sustained increases are expected to be reflected at the retail level, affecting consumer prices for fresh fruit and vegetables.
The situation has a longer-term impact due to the link between fertiliser availability and crop production. Decisions made at the farm level can affect supply in future growing seasons.
If conditions in the Strait of Hormuz do not stabilise, the global food sector may face further inflation driven by input costs and production constraints.
Source: ISN
