Fuel shortages due to the war in the Middle East are beginning to threaten global food supplies - Bloomberg
Kyiv • UNN
Farmers in Asia and Europe are facing a shortage of diesel for machinery due to the conflict. This will lead to rising food prices and disruption of planting in the world.
Food crops are becoming increasingly vulnerable to energy shortages caused by the war in the Middle East, and farmers across Asia and Europe are facing a lack of fuel needed to operate vital machinery, UNN reports, citing Bloomberg.
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Australian grain producers are facing reduced fuel supplies ahead of planting. In Bangladesh, some rice farmers are unable to get diesel for irrigation pumps, and fishermen in the Philippines may soon be forced to keep their boats ashore. Prolonged supply shortages will lead to rising food prices and exacerbate global fears of conflict-driven inflation, the publication writes.
"As soon as we start, every tractor and piece of machinery will be running, loaded - and consuming diesel," said Richard Hedy, a farmer from Buckinghamshire in the UK. "By mid-spring, we'll have run out of everything we have, and we'll have to bite the bullet and pay market price - if we can get it at all."
Two weeks after the start of the US-Israeli war with Iran, flows of oil, liquefied natural gas, and fertilizers were cut off due to attacks on energy infrastructure in the Middle East and the de facto closure of the Strait of Hormuz, the publication writes. Farmers are paying more for crop fertilizers, and for some, access to a large export market has been blocked.
Now, fuel shortages are adding another serious obstacle. Modern agriculture is an energy-intensive industry that relies on large volumes of fuel to operate machinery used for planting, harvesting, and caring for livestock on large pastures. Without these supplies, agricultural schedules, refined over generations, can be easily disrupted, the publication notes.
If farmers cannot get enough diesel, planting may be delayed or reduced, the publication writes. Mature crops left in the ground will spoil, and the cost of processing and transporting produce after harvest will also increase, the publication indicates.
"We don't necessarily see this as a fleeting phenomenon," said Paul Joules, an agricultural commodities analyst at Rabobank in Sydney. "In the long term, there will be inflation problems in the commodity market, and obviously, this could eventually affect the consumer."
The Asia-Pacific region is particularly dependent on goods supplied from the Middle East. Even as governments take measures to cap prices or reduce consumption, consumers are rushing to buy fuel, leaving industries like agriculture vulnerable to shortages, the publication writes.
In other regions, fuel shortages could reduce the acreage farmers can sow. Farmers in Australia are preparing for winter grain planting, while their counterparts in most of Europe are preparing spring crops such as barley and corn, the publication notes.
Australian farmers "are increasingly struggling to secure fuel," the National Farmers' Federation said this week, as rising prices mean some acreage may remain unsown. Livestock farmers are also vulnerable, as they need to regularly supply feed for livestock or deliver milk to market.
In Germany, farmers have to pay an additional 30 euros ($34) per 100 liters of fuel, and large tractors consume about 250 liters on busy spring days, said Henrik Wendorf, president of the Brandenburg State Farmers' Association. Prices for agricultural diesel in Romania have also jumped by about 25% since the start of the war, said Gabriel Razi, an analyst at the consulting firm AgroBrane.
Hedy, the UK farmer, stocked up on diesel last year, but he needs to buy more in about a month. He said the risk of fuel shortages is a greater threat than high prices. "If we don't have fuel to provide plants with nutrients and disease protection, they could die, and we'll be at a great loss," he said.