Parts of the Middle East are being cut off from vital food imports as vessels avoid the Strait of Hormuz, raising the risk of shortages across the Gulf and adding pressure to already high food prices in Iran.
Most of the ships carrying grain and food to feed people in the Gulf region pass through the important waterway. Of the roughly 30mn tonnes of grain imported into the Gulf region last year, about 14mn tonnes went to Iran, with most of those flows transiting Hormuz, according to data from commodities analytics company Kpler.
.jpg&h=630&w=1200&q=100&v=4908ac7b80&c=1 "Market turmoil continues in Asia amid more Middle East strikes | FinanceAsia")
Saudi Arabia imports about 40 per cent of its grains and oilseeds through its eastern Gulf ports, Kpler estimates. The United Arab Emirates brings in about 90 per cent of those commodities through Jebel Ali in Dubai. It also handles containerised food and perishables for at least four countries — the UAE, Saudi Arabia, Bahrain and Qatar — serving roughly 45mn to 50mn people.
Kpler analyst Ishan Bhanu said Iran would have “a major food issue” if the disruption continued. American and Israeli strikes threatened to halt food supply chains and infrastructure within the country, he warned, and any interruption to shipments would add to that.
“There’s an immediate risk of food insecurity within the region,” said Christian Henderson, an assistant professor of Middle East studies and international relations at Leiden University in the Netherlands. “The Gulf states are extremely dependent on imported food,” he said.
Countries further afield such as Yemen, Sudan and Somalia, which rely on the UAE as a “trans-shipment point”, could also face shortages and price rises, he added.
Although Iran grows much of its own food, it imports a lot of its grain and oilseeds, which are crushed into cooking oil and protein-rich meal used in animal feed. “Pretty much all” of its corn and large volumes of soyabeans and wheat come via the Hormuz Strait, Bhanu said.
If the conflict persists, sugar and tea could also run short, warned trade experts at the UN’s Food and Agriculture Organization (FAO).
Iran on Tuesday banned all exports of food and agricultural products until further notice to prioritise the supply of essential commodities to its people. A day earlier, Gholamreza Nouri-Ghezeljeh, Iran’s agriculture minister, had asked citizens to avoid panic buying.
“Nearly two months’ worth of flour quota has been distributed to bakeries,” he said, adding that the government was supplying essential goods “in sufficient quantities and delivering them to stores”.
Before the outbreak of the war, officials said 4mn tonnes of wheat had been stored as strategic reserves, which would be sufficient for up to four months of consumption.
Even before the latest conflict, rising food prices had pushed more Iranian households into hunger. Food and drink inflation surged to more than 105 per cent in the Iranian calendar month ending February 19, according to the country’s statistical centre. Annual inflation stood at 47.5 per cent during the same period.
To stem growing poverty, Iran introduced in early January a food voucher programme under which 80mn Iranians receive monthly credits of 10mn rials, roughly $6, to purchase essential goods.
Parliament speaker Mohammad Bagher Ghalibaf said in February that one-third of Iranians were living in poverty. Analysts say further disruption to grain imports risks pushing more households into acute hardship, particularly as the rial has weakened sharply under the threat of further escalation.
Bhanu said ships carrying corn had been waiting offshore in recent weeks because importers were struggling to secure payments in hard currency amid US sanctions on Iran’s financial system. “In the last two months, Iran has been finding it very difficult to pay for food imports,” he said.
Now countries cut off from the Strait of Hormuz would have to find workarounds, analysts said, though these are limited and likely to add costs.
According to FAO trade experts, Iran already brings in some grain overland, such as wheat from Russia or rice from Pakistan. It could also switch to importing via the Caspian and Red seas, but “we don’t think it has capacity to replace Gulf ports”, said Bhanu.
Some content could not load. Check your internet connection or browser settings.
Saudi Arabia can also divert shipments to ports on the Red Sea, while the UAE can shift some trade to other ports such as Fujairah, which lies outside the Strait of Hormuz. But the port of Fujairah was designed primarily for energy and fertiliser exports and does not match the container capacity of Jebel Ali. “They can handle containers, but not nearly in the same volume,” Bhanu said, adding that adapting Fujairah would come at a cost.
Kuwait, Qatar and Bahrain are more exposed, as they lack alternative large deep-water ports of their own and depend heavily on supply routes through Saudi Arabia and the UAE. If disruption persists, overland shipments would need to fill part of the gap.
Wealthier governments, particularly the UAE and Saudi Arabia, had the financial capacity to absorb higher import costs if necessary, said Henderson. In extreme cases, governments could fly in high-value perishables, as Qatar did during the 2017 blockade, he said.
For now, shortages in the UAE appear to reflect stockpiling rather than structural supply failures.
A Dubai resident said a branch of Waitrose supermarket on the Palm was out of whole chickens and beef mince on Sunday, but was offering rabbit instead.
The UAE’s Ministry of Economy and Tourism said on Saturday that the country’s strategic reserves of essential commodities were “robust, comprehensive and diversified” and urged people to avoid stockpiling.
Additional reporting by Verity Ratcliffe
Cartography by Steven Bernard
Source link
#Strait #Hormuz #disruption #threatens #Middle #East #food #imports
