00:00Well, it's not just oil stuck at the Strait of Hormuz.
00:03The waterway is a vital shipping route for millions of tons of food.
00:07The World Food Programme says within three months,
00:10a further 45 million people will be pushed into acute hunger
00:14if this route remains blocked.
00:17The WFP says it has around 70,000 tons of food stuck on boats
00:22unable to reach their destination.
00:25Joseph Glauber is from the International Food Policy Research Institute.
00:29Joseph, welcome.
00:30We, the media politicians, have been focusing a lot on oil, gas, the energy market.
00:36Are we missing a bigger story when it comes to food?
00:41Yeah, I think there's two stories here.
00:44One is actually the region is a very big net food importing region.
00:50You know, countries like Saudi Arabia and Iraq and Iran import a lot of food,
00:57grains, wheat, vegetable oil, sugar, vegetables, fruits,
01:03all sorts of things come through the Strait of Hormuz.
01:06So that is a problem for the region.
01:08But then the other side of it, of course, is the region is a very big exporter of fertilizers.
01:14Something like 35% of the nitrogenous-based fertilizers are in the world are exported from the Persian Gulf.
01:23So that will affect those countries that use fertilizers and, you know,
01:28for rice production, wheat production, maize production, other crops.
01:34We've been here before, though, in other crises.
01:36I mean, why is this so critical?
01:38Why does this conflict translate into higher food prices?
01:44Well, actually, you're raising a good question.
01:46And I do think that some of the other crises we've seen were actually a little worse in the sense
01:52of,
01:52right now we have a lot of grain on the world market.
01:55We've had good crops over the last couple of years, so the stocks of grain stocks and other things are
02:01quite high.
02:03We also have, you know, the fertilizer impact will take a while.
02:10We've yet to see really what the impact will be.
02:13Will farmers plant less nitrogen-intensive crops like maize and plant more soybeans?
02:20That could be one effect.
02:21Another effect could be actually just utilizing less fertilizer.
02:28That could have production effects.
02:29But remember, in 2022, we saw far higher fertilizer prices than what we're seeing right now.
02:35Yet we've seen, you know, a 35%, 40% increase in products like urea over the last, since the attack
02:45on Iran.
02:47And because of that, you know, prices are up, but they're nowhere near what they were in 2022.
02:53Now, the flip side of that is grain prices are down, and so farmers see a lot poorer margins.
03:00Mr. Trump, as we've been reporting, says the talks with Tehran are taking place.
03:05Iran says, no, they're not.
03:07We don't know, simply.
03:08I mean, I wonder how serious could this become?
03:10Are we looking at a temporary spike that might be over in a matter of weeks?
03:15Or do you sense this might be more prolonged and will cause structural issues in the global food system?
03:22Well, certainly, if you look at futures markets, the futures market participants think that high oil prices are going to
03:30stay through the end of the year.
03:31I mean, at least in the sense of over $75 a barrel, you know, I think that what you're seeing
03:38right now is a little what you saw in 2022 with grain, but this time with fertilizer.
03:44Countries are scrambling to try to find fertilizer.
03:47You have countries like India that were heavily dependent on the Persian Gulf for urea imports.
03:56And so they've been trying to look elsewhere, places like Indonesia and other countries that might be exporting nitrogen fertilizers.
04:08And I suspect like what we saw in 2022 with countries that didn't typically export wheat and other grains did
04:17so in 22 because of the high prices.
04:19I suspect we'll see some of that this time around as well if this persists.
04:24Joseph, good to talk to you. Thanks for coming on the program.
04:26Joseph Glauber from the International Food Policy Research Institute.
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