Global South Faces Food Risks As Fertiliser Flows Falter

The deepening Strait of Hormuz crisis amid the war in the Middle East is choking the critical flow of not just oil but also fertilisers and perishable goods, and the Global South may face worsening food scarcity, warned the chief of a leading international business organisation.

“We’re seeing the impact play out on fertilisers. A lot of people are not fully aware of the importance of the trade, particularly the shipment [of fertilisers] through the Strait of Hormuz and access,” said John Denton, secretary general of the International Chamber of Commerce (ICC).

Calling the hampered flow of fertilisers a silent challenger, Denton warned that the developing world may face heavy collateral damage.

“If the unintended consequences are not visible, you won’t be dealing with them. At the moment, the issue of fertiliser is subsumed under the price of oil and fuel, but that doesn’t mean this silent challenge is going away,” he argued.

“It’s emerging quite sharply as a potential crisis in developing and emerging economies which are dependent on [fertiliser] access and we’re seeing, like, a third of the supply crash,” Denton said in an interview with the South China Morning Post on Friday.

With the US-Israel war on Iran entering its fourth week, global concerns are spiking over the fate of goods trapped in the strait and shortageglobally.

US President Donald Trump issued a 48-hour ultimatum on Saturday demanding an end to the blockade of the narrow waterway through which one-fifth of the world’s oil flows, threatening a major US assault on power plants as a consequence for defiance. Iran responded by vowing a complete closure of the strait and further retaliation against America and Israel.

On Monday, Trump signalled a postponement of bombing for five days, citing talks, although Iran has denied any such contact.

With the crisis still burgeoning, Denton urged prioritisation in the international community’s efforts to restore the flow of vital goods.

“If we’re able to get a humanitarian opening of transport in the strait to get fertilisers through, we will work on the design of the system to do that,” he said, adding that in the Global South, a key issue is food scarcity and the inability to access at a particular point in time.

“The issue is galvanising up front so that there can be prioritisation.

It’s very important for us to rally the global community around that I’ve talked to a number of key industry players so that we can bring real-time information into these policy debates and the economic analysis of the cost of it,” he noted.

“Fertiliser is a critical part of agricultural production supply, so we’re very focused on that.” Denton was in Hong Kong for a roundtable discussion on trade renewal and the future of multilateralism co-hosted by the ICC and the University of Hong Kong.

He said the reach of the ICC, with members in 170 countries and regions, including in the developing world, as well as its presence in the United Nations, can help the business community navigate the shocks.

“What we do exactly is galvanising the various UN agencies, as well as the core elements of the multilateral system, into action to help deal with collateral issues of consequences,” Denton said.

He added that businesses were adapting to the turmoil.

“We’re seeing [the impact from Middle East war] play out, in particular on energy prices. That has a direct implication for business. But what are companies doing dealing with crises? The private sector is incredibly agile,” Denton said.

“Large multinationals lead value chains, who are part of the ICC. Many have established a ‘watch tower’ or war room headquarters to deal with [shocks].

“For smaller businesses, it’s much harder. So what we do is we have transparent systems and tools that are available to them.”