Food prices after Hormuz: What changes now?

Summary

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Business Daily — Food Prices After Hormuz: What Changes Now?

BBC World Service | Host: Sam Fenwick | Date: April 8, 2026

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Overview:

This episode of Business Daily tackles the global impact of the recent US-Iran conflict in the Gulf, particularly disruptions through the Strait of Hormuz, on food prices worldwide. Despite a ceasefire, spikes in fuel and fertilizer costs echo through the food supply chain, affecting farmers, food production, and ultimately, consumers. The show explores how lasting and widespread these disruptions might be, with expert insights on the ripple effects for food security and future prices.

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Key Discussion Points & Insights

1. The Ripple Effect: From Gulf Conflict to Grocery Baskets

• Host Sam Fenwick introduces the topic with real-world examples from his own shopping basket—bread, bacon, and cooking oil—whose prices are vulnerable to upstream shocks in energy, transport, and fertilizer costs.
  • “What's actually happening in the Gulf is pushing up the cost of energy, fertilizer, and transport all at once. And when that happens, it starts to feed through to the price of our food on our supermarket shelves.” (03:17, Sam Fenwick)

Notable Quote

“For months, the price of staples like this had actually been coming down. Global food prices have been falling for the past five months. But there are warnings that could be about to change.”
—Sam Fenwick (02:12)

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2. How Fertilizer is the Flashpoint (with Laura Cross, International Fertiliser Association)

• The Middle East, especially through the Strait of Hormuz, is a vital supplier of fertilizer. The conflict caused physical export blockages, forcing suppliers to scramble for alternatives:
  • “More than a third of global trade [of urea] is typically coming from this region around the Strait of Hormuz… For ammoniated phosphates… almost 20% of global trade.” (04:43, Laura Cross)
• Immediate result:
  • “Global prices of urea, for example, have increased by over 50% at this point, compared to where we were four weeks ago.” (04:50, Laura Cross)

Notable Quotes

“So there's an immediate impact in terms of the physical flow of vessels...this physical disruption has prevented the fertiliser from leaving through that route.”
—Laura Cross (05:14)

“We've seen that the global prices of urea… have increased by over 50%.”
—Laura Cross (05:50)

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3. On the Farm: Coping with Surging Costs (with Bill Webb, Arable Farmer, UK)

• Bill Webb breaks down the harsh economics facing farmers:
  • Fertilizer bought in September 2025 for £350/ton; as of now, it’s £640/ton. (07:56, Bill Webb)
  • Fuel/diesel costs nearly doubled as well.
• Farmers walk a tightrope between yield, quality, and profitability—reduced fertilizer use risks downgrading wheat from bread to feed quality, impacting returns.
  • “If we reduce the nitrogen on bread making wheat, we get less protein and then it doesn't make the grade on feed wheat.” (08:30, Bill Webb)
• Farmer profits are squeezed as global grain prices aren’t keeping pace with rising input costs.

Notable Quotes

“We do have a model where we can look at the cost of the wheat and the cost of the fertiliser and adjustments are made. The problem we've got...if we reduce the nitrogen on bread making wheat, we get less protein and then it doesn't make the grade.”
—Bill Webb (08:30)

“We were paying 86 cents for a litre [of diesel], we're now paying $1.60, so we're close to twice the price.”
—Bill Webb (09:44)

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4. The Supply Chain Squeeze: Farmer and Market Dilemmas

• Crop prices are determined globally—farmers can’t pass on added costs easily.
• Xiao Yi Deng (Argus Media) highlights high global inventories for wheat/corn, which may keep grain prices subdued despite higher expenses for farmers.
  • “Even though input costs for farmers have increased… the grain price that they achieve… may not be able to fully reflect the input cost increase.” (10:47, Xiao Yi Deng)

Notable Quote

“Farmers are facing quite tough decisions to say, is it worth still putting in that much fertilizer in order to boost yields? ... Because in the past few seasons that higher protein product has not achieved as much premium.”
—Xiao Yi Deng (11:20)

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5. Lessons from Past Disruptions & Ongoing Risks

• Similar spikes occurred after COVID-19 & Russia’s Ukraine invasion, with countries imposing export restrictions to safeguard domestic supplies.
• Countries like China, Turkey, and Russia have implemented fertilizer export bans, risking a domino effect on availability and prices globally.

Notable Quotes

“Once you have a few of these export restrictions that layer on top of each other, it can then cause somewhat of a domino effect.”
—Laura Cross (15:14)

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6. Global Food Security and Policy Worries (with Maximo Torero, Chief Economist, FAO, UN)

• Rising input costs may force farmers globally to plant less, use less fertilizer, or switch to crops requiring fewer inputs—potentially reducing yields and food supply in coming seasons.
  • “Today we have enough food in the world...but they have to replenish [supplies] at a higher cost. So what choices do they have to make?” (15:57, Maximo Torero)
• Early signals: while stocks are cushioning immediate shocks, food inflation is expected to build into late 2026 and beyond if disruptions persist.
  • “Right now we are already observing increases...corn has gone up 5 to 6%, soybeans 13.5%, wheat 1%... The inputs are in 15, 60%... But if the conflict continues and the strait continues to be closed. Yes, we will be start facing bigger prices by the second half of the year and the whole next year.” (17:11, Maximo Torero)
• Structural issues: Supply responses for fertilizer production “will take three to four years” to scale up (17:55, Maximo Torero).

Memorable Quotes

“As the input costs are going up, that directly means that our thresholds, our benefits are becoming zero or negative. ...What that means for the end of the year and for next year—less supply of food, and therefore that will affect prices. That will create food inflation.”
—Maximo Torero (15:57)

“If we open the strait today, it will take three months, more or less, to stabilize the flow and the insurance cost, but not at a full operational capacity... [for full recovery] we are talking of the full next year.”
—Maximo Torero (18:17)

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Timeline of Key Segments

| Timestamp | Topic/Quote | |-----------|------------------------------------------------------------------| | 01:08 | Opening: food price worries after Gulf conflict | | 03:17 | How fuel and fertilizer costs drive food prices (Fenwick) | | 04:38 | Fertilizer bottlenecks: Middle East’s role (Cross) | | 05:50 | Urea price up 50% (Cross) | | 07:56 | UK farmer perspective on surging input costs (Webb) | | 09:44 | Diesel costs for farmers almost double (Webb) | | 10:47 | High grain inventories keep sale prices low (Deng) | | 11:20 | Farmer’s dilemma: quality vs. profitability (Deng) | | 14:21 | Fertilizer export restrictions’ domino effect (Cross) | | 15:57 | Impact on global food security, farmer decision points (Torero) | | 17:11 | Early signs of food price inflation, and what’s next (Torero) | | 17:55 | Contrast with 2022; supply constraints will last years (Torero) | | 18:17 | Recovery timeline for trade flows through Hormuz (Torero) |

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Tone and Takeaways

• Analytical and practical: The episode takes a grounded, evidence-based look at macroeconomic shocks, but personalizes it through farmers and experts on the ground.
• Cautiously urgent: While supermarket shelves remain full for now, all voices underscore that the aftershocks of Gulf disruptions will persist, affecting next season’s harvests and perhaps making global food inflation inevitable.

Summary Quote:

“Supermarket shelves remain stocked, but behind the scenes, the pressures are still building. And what happens next will depend on how long this disruption continues and how governments, markets and businesses respond.”
—Sam Fenwick (18:48)

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For those in agriculture, policy, or simply concerned about next year’s grocery bill, this episode provides a comprehensive and clear-eyed account of how geopolitical turmoil flows down to the breakfast table—and why the story might just be beginning.

Transcript

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[Sam Fenwick]

Hello and welcome to Business Daily from the BBC World Service. I'm Sam Fenwick. The war in the Gulf has raised fresh concerns about the global food system. Today we're looking at the impact it's having on the price of food around the world, even as a ceasefire is reached.

[Xiao Yi Deng]

When it comes to serving food from farms all the way to our dinner table, that's mostly linked to fuel cost and energy cost.

[Sam Fenwick]

The Middle east is a critical supplier of fertilizer to the global market, and disruption there can quickly ripple through to food systems around the world.

[Laura Cross]

The global prices of urea, for example, have increased by over 50% at this point, compared to where we were four weeks ago.

[Sam Fenwick]

Oil and fertilizer prices have risen sharply in recent weeks, but even as tensions ease, how long might it take for those shocks to continue to feed through to farmers and shoppers? That's all coming up on Business Daily from the BBC. With a ceasefire now in place between the US And Iran, oil prices have dropped from recent highs. But the earlier surge in fuel and fertiliser costs is still working its way through the global food system, and it's been showing up in the price of food we buy. The interviews you'll hear in this program were recorded in the past week, shortly before the ceasefire was reached. I've come down to my local supermarket to do a bit of a weekly shop and I've picked up here a loaf of bread that's in my basket now. For months, the price of staples like this had actually been coming down. Global food prices have Been falling for the past five months. But there are warnings that could be about to change. I'm over at the fridges. Take this pack of bacon, for example. Because pigs are fed on imported soy and grains, when those costs rise, so does the cost of the. This bacon in my shopping basket. And here, look in my basket, I've got some oil. One of the most globally traded food products and highly sensitive to price shocks. What's actually happening in the Gulf is pushing up the cost of energy, fertilizer, and transport all at once. And when that happens, it starts to feed through to the price of our food on our supermarket shelves. So what's driving all of this? Because what we're seeing on supermarket shelves is really the end of a much longer chain. Xiao Yi Deng is the head of grain pricing at Argus Media. It monitors prices globally across commodity markets. From energy to agriculture.

[Xiao Yi Deng]

Two key costs to consider when we're talking about agricultural production would be fertilizer cost and energy cost. Because yes, it costs to buy fertilizer, to put into the field to ensure your yield and your output, and also it costs money to drive your tractor. But actually, when it comes to serving food from farms all the way to our dinner table, it also involves shipping. That's logistic cost. That's ultimately also mostly linked to fuel cost and energy cost.

[Sam Fenwick]

So that's the bigger picture, the different costs feeding into the price of food. But one of them really stands out right now, and that's fertilizer. Because when it comes to global supply, the Middle east plays a crucial role. Laura Cross is the Director of Market Intelligence at the International Fertiliser Association.

[Laura Cross]

So the region is really one of the most important global suppliers of finished fertilizer products. So the actual products that farmers are using, but also of raw materials as well. So if we look at some of the major consumed fertiliser products, like urea, which is the most commonly used nitrogen fertiliser, more than a third of global trade is typically coming from this region around the Strait of Hormuz for ammoniated phosphates, which is the main phosphate fertiliser. It's almost 20% of global trade.

[Sam Fenwick]

And what's been the immediate impact of the conflict?

[Laura Cross]

So there's an immediate impact in terms of the physical flow of vessels. Now there are producers in this region that may have other options to export, such as Saudi Arabia, but. But this waterway is really designed as being a critical export point. And that physical disruption has prevented the fertiliser from leaving through that route.

[Sam Fenwick]

And I suppose even in terms of volume, moving it over land, for example, you just couldn't move the same volumes as you can through, Correct?

[Laura Cross]

Yeah. It's costly. In many cases, these routes may not be set up.

[Sam Fenwick]

So what's that all done to prices?

[Laura Cross]

So it depends on the fertilizer because different nutrients have been impacted in different ways. But we probably have seen the most, most significant impact for nitrogen fertilisers, and that's because of how much is exported from the region. So we've seen that the global prices of urea, for example, have increased by over 50%. So that's an immediate impact, having lost over a third of that global traded volume.

[Sam Fenwick]

So when supply from that region is disrupted, it tightens global supply and pushes prices higher. But what does it actually mean for the people growing our food? Now the noise you can hear is fertilizer being spread over a field of wheat. And over the next couple of months, this process will happen again and again. The tractor is moving up and down the field in tram lines. And if I looked on the ground here, I can see what sort of looks like little pellets of hailstone, which are the little tiny bits of nitrogen which will slowly dissolve into the soil when it rains. This is a field of wheat. It was sown in around September and it's about 9 inches tall. And this farm belongs to Bill Webb, and it's one of the biggest arable farms in the northwest of England. So how long will this whole process take, Bill?

[Bill Webb]

Well, we're fertilizing it now. If we'll look after it over the summer, hopefully first week in March, it should be ready to harvest.

[Sam Fenwick]

Okay, so in the 12 months or so that this crop will be growing, how much fertiliser, of the different types of fertiliser will you actually use on it?

[Bill Webb]

Well, we'll use probably about 90 kg of potash, and we'll normally put about 240 kg of nitrogen, which equates to about half a ton of actual fertiliser per hectare.

[Sam Fenwick]

You bought your fertilisers for this growing period before the war in the Gulf started in the back end of last year. How much were you paying?

[Bill Webb]

I bought the fertilizer last September for £350 a ton for 46% urea. If I bought it yesterday, I've got a price for yesterday, and that was £640 a tonne.

[Sam Fenwick]

So if we're looking at dollars, you're looking at $465 a tonne six months ago. That's gone up to $850 a tonne. So it's doubled?

[Bill Webb]

Well, just nearly. Yeah, yeah. Not far off.

[Sam Fenwick]

Will you change or think about changing how much fertiliser you might use over the next 12 months?

[Bill Webb]

We do have a model where we can look, look at the cost of the wheat and the cost of the fertiliser and adjustments are made. The problem we've got with bread making wheat, if we reduce the nitrogen on bread making wheat, we get less protein and then it doesn't make the grade on feed wheat. Yeah, we can reduce it a little bit.

[Sam Fenwick]

So that's a real danger, isn't it? Because if you lower the grade of the wheat, it won't be sold to go into bread, it'll be going to something else and you'll get a lower price for it.

[Bill Webb]

Yeah, there's about a 20 pound a tonne premium for. For the bread making wheat, it has to be 13% protein. If it's below that, it's then degraded to feed wheat, so you lose the bonus.

[Sam Fenwick]

So you've got a balancing act to do between your yield, the quality and how much you might actually end up getting for it at the end at the market.

[Bill Webb]

But the only problem is I can put into the program the price of the wheat, the price of the nitrogen. We know the price of the nitrogen we've bought now, but we really don't know the price of the wheat. We just have to make a best guess and adjust it to that.

[Sam Fenwick]

And the pressure isn't just on fertiliser. Rising fuel and energy costs are adding to the squeeze in farming and food production.

[Bill Webb]

Let me open this. This is the. That's the diesel tank. Yeah. So we were paying 86 cents for a litre, we're now paying $1.60, so we're not close to twice the price.

[Sam Fenwick]

And you've got a tank in here which can hold what, 42,000 liters?

[Bill Webb]

That's right, 42,000 liters. And the week before the balloon went up, I was looking at filling it and I decided to leave it another week. Bad decision. That's. So I'm now. We're now buying on a. On a weekly house basis. Hopefully we won't fill the tank up until it's gone down a bit.

[Sam Fenwick]

Farmers like Bill are struggling to keep their operations profitable. But farming doesn't work like most other businesses. Farmers can't simply pass on those costs because the price they get for their crops is set by global markets. And Xiaoy Deng, head of grain pricing at Argus Media, says those markets aren't necessarily moving in the farmer's favour right now.

[Xiao Yi Deng]

We have to bear in mind that the world at the moment are largely still seeing quite high inventories for wheat and corn, and this high inventory would really weigh on grain price globally. So that means even though input costs for farmers have increased, that's fertilizer cost, that's fuel cost, but the grain price that they achieve at the end of their harvest may not be able to fully reflect the input cost increase that they are facing at the moment.

[Sam Fenwick]

So that's a really challenging situation for farmers, isn't it?

[Xiao Yi Deng]

Farmers are facing quite tough decision to say, is it worth still putting in that much fertilizer in order to boost yields? Or in order to boost the quality in my grain? For example, if I have put in enough fertilizer to achieve an average yield, is it worth putting the additional bit of nitrogen to boost the protein content in my grain in the hope that the maybe higher protein wheat or better quality corn could achieve a higher price in the coming marketing year? It's certainly more difficult for farmers in Australia because what they are facing is an outright shortage at the beginning of the planting campaign. But even in Northern Hemisphere, farmers in Russia, in Romania are all facing the same question. Is it still worth putting in the nitrogen boost right before my harvest in order to achieve a higher protein wheat? Because in the past few seasons that higher protein product has not achieved as much premium and overall that might mean that in the coming harvest, So I would say higher quality product would be hit more than lower quality product. And a lot of the time lower quality product goes into animal feed, so that would have uneven effect in the food price that we all pay at the end of the day.

[Sam Fenwick]

You're listening to Business Daily from the BBC World Service. I'm Sam Fenwick.

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[Sam Fenwick]

Today we're looking at how the conflict between the United States and Iran has been feeding through to the price of food, and we've seen how quickly that can happen before. During the COVID 19 pandemic and again after Russia's invasion of Ukraine, supplies of key fertilizers like urea, ammonia and phosphates were disrupted. Prices rose sharply as countries rushed to secure supplies, building up stocks where they could, while some major producers like China, imposed export restrictions, reducing what was available globally and pushing prices even higher. So even with a ceasefire now in place, the effects of these disruptions could be felt in global markets and on supermarket shelves for a long time to come. Here's Laura Cross from the International Fertiliser Association.

[Laura Cross]

Again, if I start with China. So the Chinese government has a long running practice of supporting domestic agriculture by enabling the supply of fertilisers to its own farmers. And those export restrictions have been in place since the end of last year. So there are already those export restrictions taking place in China, where we have seen additional export restrictions directly in response to what is happening in the Middle east is in countries like Turkey and Russia. And both of the governments in these countries have implemented bans or restrictions on the export of nitrogen fertilisers. And that's in order to try and prioritize their domestic spring planting. And once you have a few of these export restrictions that layer on top of each other, it can then cause somewhat of a domino effect.

[Sam Fenwick]

If you were to poll your members, if you were to ask them on a scale of 1 to 10, how worried they are at the moment about global food security and the supply of fertiliser, how concerned are they?

[Laura Cross]

I think all of the industry would recognise that fertiliser affordability is something that can impact farmers everywhere. So when you look at the impacts on potential food insecurity, we are looking at impacts as far as sub Saharan Africa, Latin America, Europe, of course. And so it's really a global concern.

[Sam Fenwick]

So with concerns growing about global food security, I spoke to Maximo Torero, chief economist at the UN's Food and Agriculture Organization.

[Maximo Torero]

As the input costs are going up, that directly means that our thresholds, our benefits are becoming zero or negative. So it is affecting them in terms of the types of decisions they will have to make in terms of their input cost. Today we have enough food in the world, okay, we have enough staples in the world and high value commodities. So the prices of the final commodities are not going to be aligned with the cost of increase of the inputs right now, because countries like bigger exporters already have procured most of their inputs. So they will be able to do what they have to do now, but they have to replenish that. And they know that they will have to replenish at a higher cost. So what choices they have to make? I plan less, I plan the same, but with lower inputs that will affect my yields. Or I switch to crops that are more, have more capacity to absorb and to fix nitrogen, for example, that's moving from corn, maize to soybeans, for example. Or four, I sell more to biofuels. What that means for the end of the year and for next year, less supply of food. And therefore that will affect prices. That will create food inflation.

[Sam Fenwick]

Prices will start to rise globally for food, you're predicting not until the end of this year into next year.

[Maximo Torero]

So right now we are already observing increases in price of food. Corn has gone up 5 to 6%, soybeans 13.5%, wheat 1% and rice have declined 9%. But that's not the level of the inputs. The inputs are in 15, 60% because we have enough food, enough stocks. Okay, but if the conflict continues and the strait continues to be closed. Yes, we will be start facing bigger prices by the second half of the year and the whole next year.

[Sam Fenwick]

The last time we had a kind of energy spike like this and a concern over the price of Fertilizer was was 2022, when Russia declared war on Ukraine. What do you see now as the main differences between then and now?

[Maximo Torero]

Now the story is a little bit different. We are not talking of a problem of wheat or corn. No, we're talking of a problem of inputs. Natural gas, oil, fertilizers and sulfur. There cannot be a supply response in six months. In one year, it will take three to four years to have that level of a supply response.

[Sam Fenwick]

How quickly can we get back to normal flows through the strait?

[Maximo Torero]

Look, if we stop, we open the strait today, it will take three months more or less to stabilize the flow and the insurance cost, but not at a full operational capacity, because it depends on how much damage has been done to the infrastructure. That damage, that marginal that won't be open, assume it's 20%, will take a year or more to be able to be fixed. So that's why we are saying we are talking of the full next year to be able to recover.

[Sam Fenwick]

So for now, supermarket shelves remain stocked, but behind the scenes, the pressures are still building. And what happens is next will depend on how long this disruption continues and how governments, markets and businesses respond. This edition of Business Daily was presented by me, Sam Fennec. It was produced by David can to hear more episodes, search for Business Daily wherever you get your BBC podcasts.

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