00:00Concern is rising over a growing global food crisis as the war in Iran disrupts fertilizer
00:06supplies pushing up prices and threatening harvests worldwide.
00:11The CEO of Yara, a major producer, says the shortages could mean up to 10 billion fewer
00:17meals every week.
00:18Fertilizer prices have already increased by 80% since the war began, raising the costs
00:24for farmers and increasing the risks of a bidding war over food supplies.
00:29With the biggest impact expected in poorer countries, especially in Africa, Yara warns
00:35of a global auction, leaving them unable to afford supplies.
00:40Well, let's talk now to Laurie Laban, the executive director of the Strategic Climate Risks Initiative.
00:46Laurie, welcome.
00:47We're hearing warnings that the Iran war could trigger food shortages in Africa.
00:52What is the link between this conflict and global food supply?
00:58We can think about this directly and indirectly.
01:01So the direct link is that food moves through the Strait of Hormuz.
01:04And if it's closed, there's going to be less food moving through.
01:07But the bigger concern is the effect on the things that we need to make food, particularly
01:12energy.
01:13And as you were just saying, fertilizer.
01:15A lot of fertilizer moves through the Strait in normal times.
01:20But Gulf nations themselves are also a major producer of fertilizer.
01:24They often use natural gas to create ammonia, providing something like a third of the supply
01:30of that fertilizer.
01:31And there are many more as well.
01:32So together, you're getting less food moving around the world.
01:36And then you're getting far less and therefore more expensive inputs into the creation of food.
01:41And those together are what is causing a lot of concern about a threat to global food supply.
01:45Let's be optimistic.
01:46Let's hope this war is over by Christmas.
01:49Fertilizer prices have increased, supply chains disrupted.
01:52How quickly could this start to impact harvest and food prices?
01:57Or might it all be resolved relatively in short order?
02:02Well, it's already having an effect by there being these surges in prices for things like
02:08fertilizers.
02:08You mentioned earlier the rise of about 80% when it comes to fertilizer prices.
02:13That is going to have an effect pretty quickly in the sense that there will be less use of fertilizer
02:20because it's more expensive.
02:21And if it's more expensive, you can't afford it.
02:23You're going to use less of it, which could then lead to less abundant harvest.
02:28And that's a particular concern across Africa and also into the Asian subcontinent as well,
02:35because their planting season for a number of crops is now coming up.
02:40And these are places that are also disproportionately dependent on fertilizer moving through the Gulf region
02:46as well.
02:47Now, there will then, of course, be somewhat of a delay in that those harvests will then have to grow
02:51through.
02:52And then we'll see prices rising off the back of that.
02:56But all of this, we're already seeing the effects now.
02:58It's somewhat buffered by there having been a bumper global cereal crop recently
03:04and a number of countries pre-purchasing stocks of fertilizer.
03:08But if you are a lower income country, you have had less of that pre-purchasing.
03:14So you are much more vulnerable.
03:16And so that effect is hitting you straight away.
03:18I remember standing here during the covid pandemic talking about how on Earth the world food chain was brought to
03:25its knees by the pandemic.
03:27And it seems we're back here again having another conversation about the world's dependence on a very narrow stretch of
03:35water.
03:37Absolutely. And we've now what are we the third major global supply chain shock in six years, having once every
03:46two years at the moment.
03:47And that kind of tells you that these are just not just one off occurrences, that there's actually something very
03:54vulnerable and fragile about the food systems that we have globally.
04:00And we're going to have to do something about this, because the more of this goes on, the more that
04:03there will be a compounding effect.
04:05It's not just a one off and then you're able to recover.
04:08This is coming so fast now, these disruptions, that it's very hard for some places to recover.
04:14And in mentioning that, let's look slightly toward the future.
04:17You mentioned there the hope that the war will be over as soon as possible.
04:21There could be another threat coming straight at us, which is the next round of climate extremes.
04:26So the El Nino cycle is moving into its hot phase.
04:31And there are concerns among scientists that climate change is supercharging that so much that we could see an unprecedented
04:37array of climate shocks happening as we head through the rest of this year and into next year.
04:42That is a perfect storm, literally and figuratively, particularly for low income nations.
04:47So this is another reminder halfway through the 2020s that we need to get on top of the vulnerabilities in
04:55our global food system so that we can actually weather that climate shock to come.
05:00Laurie, good to talk to you.
05:01Thanks for coming on the show.
05:02Laurie Labour and the executive director of the Strategic Climate Risks Initiative.
05:06I'll see you next time.
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