Hunger and Hormuz

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The Strait of Hormuz had been open for just about a day when Iran announced its closure again, claiming US violations of their agreement. That was not enough time for tanker owners, tanker crews and their insurance providers to figure out if it was safe to sail.

Aside from an energy shortage, countries particularly in our region that are very dependent on shipping that traverses the Strait will also be at risk of having a food shortage. It will start to really hurt in three months.

The Economist points out that although Iran and its neighbors are not big food exporters, they are a critical link in agricultural supply chains. The blockaded region sells 30 percent of globally traded fertilizer, 20 percent of liquefied natural gas (used as feedstock in making fertilizer and as fuel for cooking) plus 15 percent of oil (needed to power farm equipment).

“If the nearly two million tons of fertilizer stuck behind the blockaded strait does not start moving soon, many crops will not be nourished at the right time in the growing season. Yields will plummet, prices will rise and many poor city-dwellers will go hungry,” The Economist warned.

The Hormuz crisis affects every step in world food production: planting, harvesting, processing, transport. In rich countries energy accounts, for as much as half of variable costs in farming, says the International Energy Agency. Global food-price indices generally track the price of crude, albeit with a lag.

The chief economist of the Food and Agriculture Organization of the United Nations, Máximo Torero, warned that a disruption that persists for three months or longer will affect global planting decisions for 2026 and beyond. Under a medium-term disruption scenario, FAO anticipates reduced yields for fertilizer-intensive crops such as wheat, rice and corn.

Agronomists say fertilizer doubles the world’s agricultural output and it typically needs to be used when crops are planted to have the optimal impact. Even if the war ends tomorrow, says Julian Hinz at the Kiel Institute, a think tank, much damage is already done.

As it is, fertilizer prices have surged – Middle East urea jumped by 40 to 60 percent year-over-year. Coupled with rising fuel costs for machinery and irrigation, these “dual shocks” are forcing farmers to reduce fertilizer use, directly lowering future yields.

Reducing nitrogen fertilizer by just 10 to 15 percent can cut corn yields by up to 25 percent. Lower grain production also reduces livestock feed, affecting the availability and prices of meat and animal products.

China is the country whose leaders had enough foresight to ensure “massive stockpiles” of fertilizer capable of weathering a prolonged disruption. Most other nations are currently drawing down existing inventories or scrambling to secure new supply deals. But China has already locked down domestic supplies to insulate their agricultural sectors.

It is not surprising that the Philippines does not have sufficient fertilizer stock for the 2026 planting season. According to the Department of Agriculture, it has already purchased approximately 84 percent of its fertilizer requirements for the year, not 100 percent.

Even if fertilizer is “bought,” as the DA claims, it must be delivered. There is a risk that shipping delays could extend past the vital March-May rice and April-May corn planting windows.

Agriculture Secretary Francis Tiu Laurel Jr. also said that “supply is not the issue,” price is the real threat. Additionally, rising freight and fuel costs could push food prices up by P2 to P5 per kilo.

So, if the war in Iran is extended and Hormuz passage remains restricted, fertilizer application rates for grain crops are expected to plunge, which could result in a palay output loss of up to 1.5 million metric tons.

The Philippine Institute for Development Studies (PIDS), a government economic think tank, warned that the crisis in oil and fertilizers could push about 1.34 million Filipinos into poverty, based on a simulation of current oil price conditions.

Separate PIDS research also shows that about 30 percent of Filipino households are vulnerable to falling into poverty – including segments of the middle class. The immediate risk of the current oil price surge falls on households just above the poverty line – the so-called “near poor” – who may slip into poverty as daily expenses rise.

Social media is full of reports and photos of farmers in provinces like Benguet and Nueva Vizcaya dumping tons of tomatoes and cabbage for lack of buyers and an inability to bring produce to markets. This is a significant distress signal in our 2026 food supply chain.

These events highlight a “logistics-driven” food crisis where food exists but cannot affordably reach consumers. Diesel prices have surged to as high as P170 per liter as of April 7, 2026. For many farmers and vegetable traders, the cost of trucking produce to Manila now exceeds the actual market value of the vegetables.

Cabbage farmgate prices in Benguet plummeted to P6-P8 per kilo, with some reports indicating as low as P3-P12 per kilo for certain varieties. Farmers claim a production cost of P18-P20 per kilo.

Market monitoring shows retail prices for cabbage in Metro Manila and other areas range from P80 to over P100 per kilo.

There are reports that some farmers are refusing to plant for the next cycle because they are buried in debt. This could lead to a genuine supply shortage by late 2026.

The crisis exposes a heavy over-reliance on middle-mile transport that is 100 percent dependent on imported diesel, making the entire food system a “hostage” to the vagaries of Middle East political developments that affect global oil prices and supply.

There should be no doubt that the remaining months of the year would be difficult times no matter what government propaganda Malacañang wants us to believe. The mettle of this government will be severely tested. But the rest of us must assume the worst and be prepared.

Boo Chanco’s email address is [email protected]. Follow him on X @boochanco