ICC warns Hormuz shipping curbs could push grain prices up 80%
In short
The International Chamber of Commerce has warned that prolonged restrictions on shipping through the Strait of Hormuz could raise grain prices by as much as 80% compared with 2020 levels and lead to a global food crisis. ICC head John Denton said the world market has received about 2.7 million tonnes less fertilizer since the strait closed, with import-dependent countries the most exposed. An ICC report cited by Kommersant says restoring shipments through the strait should be treated as a humanitarian necessity.
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The International Chamber of Commerce has warned that prolonged restrictions on shipping through the Strait of Hormuz could raise grain prices by as much as 80% compared with 2020 levels and lead to a global food crisis. Both Kommersant and the state news agency TASS attributed the warning to the chamber's head, John Denton, whom TASS described as the organisation's secretary general. [ 1 , 2 ]
Denton told The Wall Street Journal that disruption to a vital Middle East sea route had produced an energy shock and that a global food security crisis was now building. He said the world market had received about 2.7 million tonnes less fertilizer since the strait closed. Import-dependent countries are most exposed, he said, citing the Philippines, which buys about 90% of its fertilizer abroad, and he added that supply disruptions in the Black Sea are compounding the problem. [ 2 ]
According to the ICC report cited by Kommersant, resuming shipments through the Strait of Hormuz should be treated as a humanitarian necessity for the world. The report says about 1 million people could die of hunger by 2030, and that even if access to the strait is restored quickly, 7 million to 16 million people would still be underweight by that year. [ 2 ]
Kommersant reported that restrictions on LNG exports from Qatar and the UAE through the strait could raise gas prices and thereby cut nitrogen fertilizer production in Europe. With the spring application season under way, a shortage of nitrogen and compound fertilizers could raise farmers' costs and reduce agricultural supply, it said. The outlets describe the strait's share of fertilizer shipments differently: TASS reported that the shipping restrictions have affected almost 40% of world fertilizer trade, while Kommersant said about 40% of nitrogen fertilizers moved by sea passed through the strait and about a third of the global seaborne fertilizer trade depended on the route. [ 1 , 2 ]
The ICC's estimate applies to a scenario of prolonged restrictions, Kommersant said, because the effect accumulates as producers face fertilizer shortages. [ 2 ]
Why it matters
Two tier-1 outlets — a state news agency and a leading business daily — carried the warning, framing the disruption as a global trade and food-security issue rather than a regional one. The documents tie the shipping restrictions to fertilizer, gas and grain costs that the ICC says would feed through to farmers and consumers well beyond the region, hitting import-dependent countries hardest.
Key facts
- The International Chamber of Commerce warned that prolonged shipping restrictions in the Strait of Hormuz could raise grain prices by up to 80% compared with 2020 levels. [ 1 , 2 ]
- ICC head John Denton said the disruption to the Middle East sea route had caused an energy shock and that a global food security crisis was building. [ 2 ]
- Denton said the world market has received about 2.7 million tonnes less fertilizer since the strait closed. [ 2 ]
- Both outlets cite a figure near 40% for the strait's role in fertilizer shipments, but describe it differently. [ 1 , 2 ]
- An ICC report cited by Kommersant says resuming supplies through the strait should be considered a humanitarian necessity, with about 1 million people possibly dying of hunger by 2030. [ 2 ]
- Denton said import-dependent countries such as the Philippines, which buys about 90% of its fertilizer abroad, are most at risk, and that Black Sea supply disruptions are worsening the situation. [ 2 ]
- Kommersant reported that restrictions on LNG exports from Qatar and the UAE via the strait could raise gas prices and cut nitrogen fertilizer production in Europe. [ 2 ]
Confirmed by several sources
- The International Chamber of Commerce has warned that shipping restrictions in the Strait of Hormuz could raise grain prices by up to 80%. [ 1 , 2 ]
- The warning is attributed to ICC head John Denton, described by TASS as the organisation's secretary general. [ 1 , 2 ]
- Both outlets state that restrictions in the strait have affected a large share of the global fertilizer trade, each citing a figure around 40%. [ 1 , 2 ]
Still unclear
- What caused shipping through the Strait of Hormuz to be restricted, and when it began. Neither document gives a cause or a date, referring only to the closure of the strait as the starting point.
- The exact scope of the 40% figure. TASS says the restrictions affected almost 40% of world fertilizer trade, while Kommersant says about 40% of nitrogen fertilizers moved by sea passed through the strait and about a third of global seaborne fertilizer trade depended on the route.
- Whether the 80% grain price rise is measured against 2020 levels. Kommersant states the comparison with 2020; TASS reports the 80% figure without a baseline.
- How long the restrictions will last. Kommersant says the ICC estimate applies to a scenario of prolonged restrictions and that the effect accumulates, but the documents do not say when shipping might resume.
- The ICC report's projections that about 1 million people could die of hunger by 2030 and that 7 million to 16 million could be underweight. These figures appear in only one document, Kommersant, citing the ICC report.
What local media are saying
Timeline, local time
- TASS reports that the ICC said restrictions in the Strait of Hormuz could raise grain prices by up to 80% and affected almost 40% of world fertilizer trade. [ 1 ]
- Kommersant publishes the ICC head's warning of a global food crisis, citing his interview with The Wall Street Journal and an ICC report. [ 2 ]