Name: How the Iran war could raise food prices | Global News Podcast
Uploaded: 2026-03-24T01:33:07.000Z
Duration: 9 min 32 s
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Welcome to the Global News Podcast on YouTube.

I'm Charlotte Gallagher, and today we're joined by our business correspondent, Michelle Fleury.

Adverbs of degree

Michelle, it's been a really turbulent time for the global economy after the U.S.-Israel war with Iran started.

The head of the International Energy Agency has said the world is facing a worse crisis than the oil shock of the 1970s and the fallout from the Ukraine war combined.

I mean, what is going on on the financial markets?

I don't think there's really any way other than that to describe it.

You've got markets up, down, you've got oil prices again, um, you know, moving sharply.

This volatility is being driven by the fact that people just don't know how long this conflict is going to last and how much economic damage it's going to cause.

And at the same time, obviously, you've got the head of the International Energy Agency saying that world leaders are underestimating the impact.

I and I think, you know, talking to kind of traders here on Wall Street, you're hearing, uh, a similar thing, which is that, you know, no company is going to be spared from this.

The longer this goes on, um, because oil is such a crucial input in so many aspects of our lives, uh, that it's going to trickle through to, to so many things, and

the longer it lasts, the more that, that impact is going to be.

In, in terms of the actual shipping markets, obviously, we've seen, uh, rates and insurance rates and everything go up and down.

The cost of shipping fuel, uh, has also increased,

and so it's making it very difficult beyond the simple sort of maritime blockade that is effectively taking place in the Strait of Hormuz.

Uh, it's just incredibly difficult for, for companies that run tankers to know where to dock, where is the safe place, let alone what passage.

And even if they do attempt to kind of, uh, make a voyage, how do they get fuel?

So the chaos in logistical terms, uh, i-is deeply challenging,

and it-it's kind of causing a lot of frustration, late nights, lots of headaches for those in the industry.

And we've talked so much about oil and gas,

but also food is going to become a problem if this war continues.

The United Nations has warned that tens of millions more people could face acute hunger if this war lasts until June.

I mean, this has to do with fertilizer and the cost of fertilizer.

I think, as you say, so much of the attention on this shipping route has been on, on energy going through there.

But, you know, crucially, the Gulf accounts for about a third of urea, which is kind of nitrogen fertilizer, passes through that shipping route,

Uh, there is also the fact that in countries like India, for example, they've already, um, ha are struggling with imports of liquefied natural gas.

That is a key component used to make fertilizer, and so they've had to scale back production domestically.

So you've got this kind of double whammy going on where you can't import,

but also domestically trying to make it is challenging because of what is happening with the energy picture.

And it comes at a crucial time because in parts of the world it's planting season.

So you can imagine if suddenly your costs have shot up, in some cases as much as 40% for fertilizer, um, then, then that kind of has a knock-on effect.

Now, speaking to kind of agricultural experts on this, they say it takes roughly about six months to a year before that translates into higher prices at the grocery store.

But make no mistake, the impact is being felt immediately by farmers who, as I say, are currently kind of planning their next planting season.

And China as well, they do produce a lot of fertilizer,

but now they're saying, "We're not going to export any.

We need to keep this in reserves for our own agriculture industry." Yeah.

I mean, so countries like India, places like that, uh, rely heavily on imports from the Gulf.

And I think there had been hope amongst officials in those countries, "Look, maybe China, which makes a lot of fertilizer, will ride to the rescue." Uh, but

instead, what they've announced is export controls.

So that's going to have a knock-on effect.

I mentioned India, but another country is Thailand.

And the reason for that is because they are big consumers of fertilizer from China.

So you're starting to see the kind of domino effect, how it ripples through and becomes a much bigger problem.

It is a kind of a kind of crop that depends heavily on fertilizer.

So you could see the knock-on effect feed back to China where maybe six months to a year from now, their imports of rice from Thailand or from countries like Brazil where they import a lot of soybeans, you know, those crops, if they get affected and they start having to pay higher prices, you start to see how this snowball effect kind of gains speed,

and that's why you have these officials warning about the, the knock-on effect this will have on prices, on food prices down the road.

And Michelle, all this could affect crops like rice,

and when we're looking at less developed nations, they really rely on these crops.

And when you are talking about less developed nations, the other thing to remember is that the, the people kind of, you know we're not talking giant agricultural firms.

We're talking smallholders who really aren't able to bear these higher costs of things like fertilizer.

And so that's why you have agencies like the UN World Food Program warning that, you know, there is a risk of, of acute hunger for some sort of 45 million people as a result of this conflict, kind of worsening conditions on the ground.

And this could have serious political consequences for President Trump because people are already feeling it when they're buying fuel for their car at the pumps, but

also the consequences it could have for U.S.

And I know that you've been speaking to some of them, haven't you, Michelle?

I mean, I was speaking to Lance Lilybridge.

He was also the head of the the former head of the Farmers' Corn Grower Association there.

And he was saying, "Look, even before this crisis, prices had been shooting up." Uh, and

he was sort of pointing out that the U.S.

only buys about 6% or so, uh, of fertilizer from the Gulf region,

and yet it's having a massive impact, uh, to the point where he was saying, "In some cases, it's no longer economical to plant this." And, and

he was kind of telling me about, you know, there were lots of factors in the U.S.

that led to this moment, but this is kind of, uh, if you like, the cherry on top.

It's pushing things to breaking point where it becomes unsustainable for many farmers.

that is obviously a huge concern because in his case, uh, corn, you know, that's important not just in itself,

but also corn is important in livestock food.

So that means that starts trickling up and pushing up the price there.

It is also used in cases in industrial uses, for example, in paper.

Um, so there are ways in which we can't even begin to imagine how this will impact,

and yet they are sounding the alarm right now saying, "Look, this is a problem for us.

This is, uh, you know, unsustainable." And I'm just thinking back to the last presidential campaign and President Trump saying that he was going to lower grocery prices in the U.S.

What could it mean if they keep going up for President Trump?

I mean, this was an election in which Donald Trump in the last election said, you know, "I will make your lives better in, in economic terms." And yet you look at what's happening right now,

I mean, America is heading to the polls in November for national elections.

It all depends, again, on how long this conflict goes on,

but the worry is that people are going to see prices go up, and,

and so that's going to worsen an affordability crisis.

So right now, you go to the petrol pump, obviously, you're reminded daily of, of kind of higher prices.

But, you know, in a couple of months from now, will you start to see that in food prices?

But if the perception among consumers is that things are moving in the wrong direction, uh, it'll be interesting to see, you know, how that hurts or doesn't hurt Republicans and Donald Trump, uh, in November's midterms.

Is there anything that can be done to manage the problems in the supply chain?

I mean, it's hard to see what you can do short of reopening the Strait of Hormuz.

I mean, we've seen from past crises remember the attacks of the Houthis in the Red Sea?