Prolonged Hormuz shock could push cereal prices up by more than 80%

A prolonged disruption to fertiliser and energy markets linked to the closure of the Strait of Hormuz could push global cereal prices sharply higher, with potentially severe consequences for food security and public health, according to new modelling commissioned by the International Chamber of Commerce (ICC). 

In the study’s most severe scenario, global cereal prices rise by as much as 81% above 2020 levels. The shock also feeds through sharply to households, with consumer food prices in East Asia, the Pacific and Sub-Saharan Africa rising close to 70% above a 2020 baseline.  

Conducted by researchers at the University of Edinburgh, the University of Aberdeen and Scotland’s Rural College, the modelling shows how the shock would work its way through the global food system. Higher fertiliser and energy costs reduce nitrogen fertiliser use by approximately 37% and cereal productivity by up to 10%, tightening supply and raising prices for consumers. 

For poorer households, these price increases translate into lower calorie consumption, less diverse diets and higher rates of underweight. Under the same severe and sustained scenario, the modelling suggests that the shock could contribute to approximately one million additional dietary health-related deaths in 2030 and leave 67 million more people underweight. 

The burden would fall overwhelmingly on lower-income regions. South Asia, Sub-Saharan Africa and East Asia and the Pacific would account for around 80% of the additional mortality and more than 90% of the additional underweight burden. Modelled health outcomes would change little in higher-income regions. 

The disruptions extends far beyond the immediate conflict zone because the Strait is a critical conduit for both agricultural inputs and energy. Prior to the closure, Persian Gulf producers reliant on the route account for approximately 40% of global urea trade, nearly 20% of global oil supply and more than 20% of global liquified natural gas (LNG) trade.

ICC Secretary General John W.H. Denton AO said: “The new research exposes the extraordinary risk that continued disruption in the Strait of Hormuz poses to global food systems. A prolonged shock could contribute to one million additional diet-related deaths in 2030 and leave 67 million more people underweight – with the overwhelming burden falling on the world’s poorest regions.

“In this context, the recent fall in urea prices should not be mistaken for market normalisation. Industry estimates suggest that 3.7 million tonnes of demand was destroyed or deferred between April and June – a 27% year-on-year decline. Much of the adjustment has come from farmers and buyers stepping back, rather than a durable restoration of supply. As demand returns ahead of forthcoming planting seasons, there is a real risk that prices could spike again.”

“Restoring commercial shipments of fertilisers and related inputs through Hormuz must be understood as a global humanitarian imperative. In the absence of a durable agreement to reopen the Strait, we urge the relevant governments to activate temporary mechanisms to facilitate the safe and predictable movement of essential agricultural nutrients before critical planting and application windows close.”

Lead author of the study, Dr. Jay Burns from the University of Edinburgh, commented: “The crisis centred on the Strait of Hormuz is creating a chain reaction from conflict to nitrogen fertiliser and energy price spikes, and on to food security and human health. The impacts of this localised conflict are felt globally, and our research highlights how those with the least capacity to absorb the resulting price shocks are likely to feel them most severely. Wealthier countries are generally better equipped to absorb impacts through greater fiscal capacity, social protection and access to global markets.

Our modelling also suggests that in some overconsuming countries, higher food prices may modestly reduce excessive demand. But the reality facing the world’s poorest households, who already spend a large share of their income on food, is that even modest price increases will mean compounding reductions in both total calorie intake and dietary diversity. This is why geopolitical and market shocks are increasingly central in planetary health discourse: disruptions to food systems can have consequences for both food security and human health, with the greatest impacts falling on those least able to bear them.”

The research finds that even a gradual recovery would leave lasting effects. In scenarios where prices take five years to return to normal, an additional 7–16 million people would still be underweight in 2030. The authors also caution that restored trade flows would not immediately eliminate the shock – disruption to planting cycles, inventories and market expectations could prolong the welfare and health consequences of this instability.

ICC has previously called for practical arrangements to restore the safe and predictable movement of fertilisers and essential agricultural inputs through the Strait, alongside coordinated financial support for vulnerable, import-dependent economies.

Notes to editors

• The study, Geopolitical fertiliser and energy shocks threaten dietary health in vulnerable populations, is an early-stage research manuscript that has not yet been peer-reviewed or published in a journal. The version discussed here is available as a pre-print on SSRN, and its findings should be considered provisional. 
• The scenarios are modelled outcomes based on stylised fertiliser, transport and other energy-exposed input-costs, not forecasts or modelled reductions in physical trade flows. The paper is a preprint and has not yet been peer reviewed. 
• The study modelled six shock scenarios in which nitrogen-fertiliser costs either double or triple in 2026 with corresponding increases applied to transport and other agricultural-input costs. These cost shocks then either return linearly to the reference baseline over two or five years or remain elevated. 
• The most severe scenario assumes that nitrogen fertiliser costs triple in 2026 and remain elevated, alongside associated increases in energy, transport and other agricultural input costs.  
• Results are measured against a no-shock reference scenario and each scenario was evaluated through 30 ensemble runs with parameters sampled from probability distributions to capture uncertainty. 
• The research was commissioned and funded by ICC. The authors retained full responsibility for the study’s design, analysis, interpretation and conclusions.