Very few countries are resilient to this.
A conflict centered on the Strait of Hormuz has placed the world's most vulnerable populations at the intersection of geopolitics and hunger, as disrupted fertilizer flows and surging energy costs threaten to unravel years of fragile recovery across developing economies. Where wealthy nations absorb such shocks as inconvenience, nations like Bangladesh, Somalia, and Kenya face them as existential pressure — their households spending nearly half of all income on food and fuel before prices began to climb. The war in Iran, still young, is already rewriting the economics of the next harvest, and the question history will ask is whether the world moved quickly enough to protect those who had the least margin to lose.
- Fertilizer prices have surged 30–40% and oil benchmarks over 50% since fighting began, with up to 70% of global urea supplies now at risk from a single choke point — the Strait of Hormuz.
- Countries like Kenya, Bangladesh, and Somalia, which hold minimal fertilizer reserves and depend heavily on Gulf suppliers, face a compounding crisis with almost no buffer to absorb the shock.
- The blow lands at the worst possible moment: developing nations had only just begun recovering from pandemic wounds and the Ukraine war's grain disruptions, and those hard-won gains are now in danger of reversing.
- The damage will travel in waves — energy costs hit first, then nitrogen-intensive crops like corn and wheat falter, then livestock feed prices rise, and finally bread, eggs, and dairy become unaffordable for the most vulnerable families.
- Policymakers are scrambling — the FAO is urging contingency plans, the EBRD is preparing support packages, and governments from Egypt to Rwanda are bracing for social instability — but the window to prevent the second wave is narrowing.
The war in Iran is redrawing the map of hunger. At its center is the Strait of Hormuz, now effectively under Tehran's control, through which roughly 30 percent of the world's traded fertilizers once flowed freely. The Gulf region supplies the ammonia and urea that farmers across the developing world depend on to grow corn, wheat, and feed crops. Bank of America estimates the conflict threatens 65 to 70 percent of global urea supplies. Fertilizer prices have already risen 30 to 40 percent. Oil and gas benchmarks are up more than 50 percent since fighting began in February.
The pain is not distributed equally. In wealthy nations, food and fuel account for less than a quarter of household spending. In emerging markets, that figure climbs to 30 to 50 percent — meaning a shock that barely registers in London or New York becomes a survival crisis in Lagos or Dhaka. As Moody's managing director Marie Diron observed, this exposure leaves developing economies uniquely vulnerable to price volatility driven by events entirely outside their control.
The timing is particularly cruel. Developing nations had been recovering. Global food inflation had fallen to its lowest level since 2017. Investment was returning. Then the Iran conflict arrived and threatened to erase those gains. Unlike oil, there is no global strategic reserve of fertilizer. Nations like Brazil and Nigeria have some insulation — their own agricultural capacity or domestic production — but Somalia, Bangladesh, Kenya, and Pakistan hold minimal stocks and rely heavily on Gulf suppliers. Kenya's fertilizer costs had already risen 40 percent before the latest spike.
The consequences will unfold in stages. Higher fertilizer and energy costs will first suppress yields of nitrogen-hungry crops like corn and wheat. Reduced harvests mean less livestock feed, which drives up the cost of bread, poultry, eggs, and dairy. Economists warn that if the conflict persists even a few more weeks, planting will suffer and the damage will extend well beyond this season. The FAO's chief economist noted that very few countries have the resilience to withstand such a chain of shocks.
Governments and institutions are preparing for the worst. Egypt is reinforcing bread subsidies to preserve social stability. The EBRD is readying support packages across the roughly 40 emerging economies it serves. The FAO is urging development banks to activate contingency plans. Meanwhile, markets are already pricing in delayed interest-rate cuts across emerging economies as energy-driven inflation builds — a shift that threatens growth in countries already operating on the edge. The race now is between diplomacy and the harvest calendar.
The war in Iran is reshaping the economics of hunger across the developing world. Fertiliser shipments are blocked. Energy prices have doubled. And families in countries that can least afford it are about to pay the price.
The disruption centres on the Strait of Hormuz, the waterway Tehran now effectively controls. Before the conflict began in February, roughly 30 percent of the world's traded fertilisers moved through those waters. The Gulf region supplies enormous quantities of ammonia and urea—the nitrogen-rich compounds that farmers depend on to grow corn, wheat, and the feed crops that become meat and dairy. Bank of America estimates the war threatens 65 to 70 percent of global urea supplies. Prices have already climbed 30 to 40 percent. Oil and gas benchmarks have risen more than 50 percent since fighting erupted.
This matters because developing economies live on a different economic planet than wealthy ones. In the United States and Europe, food and fuel account for less than a quarter of what households spend. In emerging markets—the nations where hundreds of millions of people live on thin margins—food and fuel consume 30 to 50 percent of every budget. A shock that barely registers in London or New York becomes a crisis in Lagos or Dhaka. "This exposure leaves many economies particularly vulnerable to externally driven price volatility," said Marie Diron, managing director at Moody's Ratings.
The timing is brutal. Developing countries had begun to recover. The pandemic had receded. The Ukraine war's initial shock to grain markets had faded. Global food inflation had dropped to its lowest level since 2017. Investment was flowing back. Then Iran happened. "This could have a big impact on prices, food prices, over time," said Odile Renaud-Basso, president of the European Bank for Reconstruction and Development, which lends across roughly 40 emerging economies. The gains of the past two years now risk unravelling.
Unlike oil, there is no global strategic reserve of fertiliser. Some countries have cushions. Brazil and Argentina, far from the conflict and home to their own agricultural strength, are somewhat insulated—though Brazil's agricultural minister warned of supply problems ahead. Nigeria, an oil producer, has the Dangote fertiliser plant to help absorb the shock. But Somalia, Bangladesh, Kenya, and Pakistan typically hold minimal fertiliser stocks and depend heavily on Gulf suppliers. Kenya's fertiliser costs had already risen 40 percent before prices spiked further. Rwanda is scrambling to figure out how to protect its farm sector.
The path from fertiliser shortage to empty stomachs is not instantaneous but it is relentless. Higher fertiliser costs and energy prices will first hit nitrogen-intensive crops—corn and wheat especially. Reduced yields mean less feed for livestock. Feed costs rise. Bread, poultry, eggs, dairy all become more expensive. "That's always the issue with these kinds of supply shocks, that you get the energy part first, and as that subsides, you can get the food portion coming through the second wave," said David Rees, head of global economics at Schroders. If the conflict lasts even a few more weeks, Maximo Torero, chief economist at the Food and Agriculture Organization, warned that planting will suffer and yields will fall. "Very few countries are resilient to this," he said.
Policymakers are already bracing. Egypt subsidises bread to maintain social stability. In 2022, protests erupted from Chile to Tunisia over food prices. Higher fuel costs could push crops toward biofuel production instead of food. An economic slowdown in the Gulf—home to millions of migrant workers—could reduce remittances flowing to Pakistan, Lebanon, and Jordan, squeezing households further. Markets are already pricing in delayed interest-rate cuts in emerging economies as energy-driven inflation builds, a shift that threatens growth in countries already fragile. The European Bank for Reconstruction and Development is preparing support packages. The FAO is urging development banks and governments to ready contingency plans. The question now is whether the war ends quickly enough to prevent the second wave.
Citas Notables
This could have a big impact on prices, food prices, over time.— Odile Renaud-Basso, president of the European Bank for Reconstruction and Development
If it goes further than a month, we will have problems of planting, and we will have problems of yields.— Maximo Torero, chief economist at the Food and Agriculture Organization
La Conversación del Hearth Otra perspectiva de la historia
Why does a war in Iran matter so much to someone buying rice in Bangladesh?
Because Bangladesh doesn't grow enough fertiliser and can't store much of what it imports. When the Strait of Hormuz closes, the supply chain breaks. Prices spike. And food already takes up half of what a poor family spends.
But couldn't countries just buy from somewhere else?
There is nowhere else at scale. The Gulf produces the fertiliser the world relies on. There's no backup. And unlike oil, there's no emergency stockpile sitting in warehouses.
So this is worse than the Ukraine war?
Different. Ukraine cut grain exports suddenly—a shock to supply. This cuts fertiliser, which means lower harvests months from now. It's slower but potentially deeper. And it hits countries that were just starting to breathe again.
What happens if the war lasts six months?
Farmers can't plant properly. Yields drop. By autumn, staple crops are scarce. Prices stay high through the winter. Families choose between food and medicine. Governments that subsidise bread face budget crises.
Is anyone prepared?
A few. Brazil has its own agricultural base. Nigeria has a domestic fertiliser plant. But most developing countries are exposed. Rwanda is trying to figure it out in real time. Kenya's costs are already up 40 percent.
What's the endgame?
If the war ends soon, prices stabilise and the shock fades. If it doesn't, you get social unrest, slower growth, and families struggling to feed themselves. The development banks are preparing for that scenario.