The Iran war and the Ukraine-Russia conflict are creating a "multidirectional squeeze on world agriculture" that could spiral into a crisis, a new report finds.
Why it matters: Wars and extreme weather are colliding to threaten global food supplies and drive up prices, especially in vulnerable economies.
- The report explores how the El Niño phenomenon could compound the problems of restricted supplies of key fertilizer ingredients, higher fuel costs on the farm and more.
- The S&P Global Institute report is an unusually holistic look at the topic.
Driving the news: The analysis comes alongside new warnings about food from the International Monetary Fund.
- Its World Economic Outlook last week sees an overall 10% increase in fertilizer prices this year and food costs rising by 5% in 2026 and 2.4% in 2027, though it depends on the region.
- "Higher energy and food prices could have severe effects on poverty and food security" and threaten political stability in vulnerable economies, the IMF warned.
State of play: Food producers need steady supplies of natural gas and sulfur for fertilizer, diesel for farm machinery and food transport, and open sea lanes for trade, S&P notes.
- "Conflict is now testing all of them at once, just as El Niño tests the harvest," states the report from the research and consulting firm.
- "The risk is increasing, especially for low-income countries, where food costs amount to about half of household spending," it states.
Zoom out: The disruptions could affect agricultural production worldwide, from soybeans and corn in Brazil to wheat in Australia, S&P finds.
The intrigue: The S&P report also warns of something that has received somewhat less attention.
- The diesel supply crunch doesn't just raise costs for farmers. It also works alongside pro-biofuels policies to make biodiesel production more attractive.
- "The knock-on effect is that, in some regions, crops for fuel become more valuable than crops for food."
Zoom in: A few stats via S&P illustrate the overlapping threats.
- Middle Eastern prices for exported sulfur, a fertilizer ingredient, reached a record $1,000 per metric ton in July, after starting the year at a historically high $500 per metric ton.
- 47% of the global sulfur trade normally goes through the Strait of Hormuz.
- In Indonesia, industrial use of palm oil, largely for biodiesel, is expected to be roughly five times its 2015-16 level.
The bottom line: A global food crisis is by no means certain.
- But if wars keep disrupting energy and fertilizer supplies, and weather cuts harvests in key regions, "the elements of such a crisis will be falling into place," S&P warns.