Black Sea Conflict Sparks Global Food Crisis

A global food crisis is brewing due to a combination of factors including constrained fertilizer supply and rising conflict in the Black Sea. The Strait of Hormuz, which connects the Middle East to the rest of the world, has been partially closed, disrupting critical fossil fuels and fertilizers exports from the region. This has led to concerns over food availability as grain exports from the Black Sea are collapsing.

The situation is compounded by a widening conflict between Russia and Ukraine in ports along the Black Sea and the Sea of Azov, further reducing fertilizer supply and increasing war risk insurance premiums. Energy prices are running through every link of the chain, powering farm machinery, providing feedstocks for fertilizer, and moving crops from field to port to consumer.

The crisis is not limited to food imports but also affects fuel prices, with refined-product markets being exceptionally tight. This has resulted in a multi-directional squeeze on the global food system, echoing the 2007-08 food-and-fuel crisis that created unrest across dozens of countries.