Fertiliser boss says war puts 10 billion meals a week at risk

An important development from the financial markets: Fertiliser boss says war puts 10 billion meals a week at risk 8 minutes ago Share Save Add as preferred on Google Simon Jack Business editor Getty Images /Tatiana Terekhina The interruption to supplies of fertiliser and its key ingredients due to the war in Iran could cost up to ten billion meals a week and will hit poorest countries hardest, according to the boss of one of the world's biggest fertiliser producers. Svein Tore Holsether, chief executive of Yara, told the that hostilities in the Gulf, which have blocked shipping through the Strait of Hormuz, are jeopardising global food production. Reduced crop yields as a result of lower fertiliser use could lead to a bidding war for food, he warned.

He urged European nations to consider carefully the impact of a price war on the "most vulnerable" in other countries. "We're up to half a million tons of nitrogen fertiliser not being produced in the world right now because of the situation we are in," Holsether said. "What does that mean for food production?

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I would get to up to 10 billion meals that will not be produced every week as a result of the lack of fertilisers. " Not applying nitrogen fertiliser would reduce crop yields for some crops by as much as 50% in the first season, he said. Farmers around the world were facing a daunting series of challenges, Holsether added, as the prices they can command for the food they produce had not yet adjusted to cover the higher bills they are facing.

"They're faced with higher energy costs, diesel for a tractor is increasing, other inputs for the farmers are increasing, fertiliser cost is increasing, but yet the crop prices haven't increased to the same extent yet," he said. Bidding war The price of fertiliser has soared by 80% since the beginning of the US and Israel's war on Iran. A continuation of the conflict could result in a bidding war for food between richer and poorer nations, Holsether added.

"If there's a bidding war on food and one that Europe is robust enough to handle, what we need to keep in mind in Europe is, okay, in that situation, who are we buying the food away from? "That is a situation where the most vulnerable people pay the highest price for this in developing nations where they cannot afford to follow that. " That had implications for "food affordability, food scarcity and hunger" the Yara boss said.

Although the UK is very unlikely to face food shortages, the increased costs facing food producers are expected to start showing up on weekly food bills in the next few months. The Food and Drink Federation recently forecast that food inflation could reach 10% by the end of the year.

Financial markets are tracking the development closely as investors assess the likely impact.