The Strait of Hormuz blockade causes international grain prices to soar, signaling a food crisis.

The standoff between Iran and the United States has led to the continued blockade of the Strait of Hormuz, causing international grain prices to rise again. The disruption of this energy transportation corridor not only affects crude oil supplies, but also hits the supply of fertilizer raw materials, which in turn triggers instability in the prices of major grains such as soybeans, wheat, and corn.

According to a report by Infomax5, the soybean futures price for May delivery on the Chicago Mercantile Exchange is based on the closing price of May 1 and is 1187.75 US cents per bushel. A bushel is a volume unit used in grain trading, and for soybeans it is approximately 28.123 kilograms. Before the war broke out, soybean prices fluctuated only around 1150 US cents per bushel; but on March 12, the intraday high rose to 1223.25 US cents. In half a month, the increase exceeded 6%. After that, Iran and the United States reached a two-week ceasefire agreement on the 8th of last month, and prices once moved toward stability in the 1160 to 1170 US cents range. However, as ceasefire expectations weakened and tensions between the two sides escalated again, the price has entered an upward channel again since last week.

This volatility is not limited to soybeans. On the same exchange, wheat futures for May delivery closed on May 1 at 624.5 US cents per bushel, which is more than 10% higher than the pre-war high. In April, prices had once fallen to 567.5 US cents, but as the second round of Iran–U.S. ceasefire negotiations broke down and international oil prices climbed again, the upward trend became clear. Corn is similar. The May-delivery corn futures price closed on May 1 at 468.25 US cents per bushel, approaching this year’s peak—473.75 US cents on March 23, when fighting escalated. Grain markets are usually heavily affected by crop harvests and weather, but this war, logistics disruptions, and rising energy prices have jointly driven prices higher.

The core of market turmoil lies in the supply problem of fertilizer raw materials. The Middle East is an important production area for major fertilizer raw materials such as nitrogen and urea. Before the war, about one-third of the world’s seaborne fertilizer raw materials needed to pass through the Strait of Hormuz. After the passage was obstructed, prices for urea, ammonia, potassium, and sulfur surged significantly, and supplies also became tight. Fertilizer is a key input determining crop yields; when fertilizer prices soar or procurement becomes difficult, it ultimately leads to rising agricultural production costs and worries about reduced output. This is especially true for countries with a high dependence on Middle Eastern fertilizers, where food security burdens are bound to worsen. In India, 46% of the workforce is engaged in agriculture; concerns about poor harvests have intensified due to fertilizer shortages. The country is pushing for large-scale fertilizer imports and providing subsidies to domestic fertilizer companies so that farmers can buy fertilizers at lower prices. It is reported that China, the world’s largest exporter of sulfuric acid, after the price of sulfur—the core raw material for phosphate fertilizers—rose, also notified its sulfuric acid production enterprises last month, citing food security, to stop exports from this month.

Future price fluctuations are likely difficult to calm down easily. U.S. President Donald Trump announced that on the morning of the 4th, Middle East time, he would launch the “Freedom Plan” to help evacuate third-country ships trapped in the Strait of Hormuz. However, the Wall Street Journal, citing senior U.S. government officials, said that the U.S. military does not plan to directly escort merchant ships. Iran maintains that it will strike if U.S. forces enter or approach the strait. According to the UK maritime trade organization, the day before, an oil tanker was attacked by unidentified flying objects in waters about 145 kilometers north of Fujairah, UAE. In this atmosphere of unease, as of 5:55 p.m. Korea time on the 4th, the price of the June-delivery West Texas Intermediate crude oil futures on the New York Mercantile Exchange rose by 1.33%, to 103.30 USD per barrel. If international oil prices and fertilizer raw material prices rise in tandem, pressure on grain prices may persist long term; this trend may in the future lead to overall tightness in global food supply and an expansion of export control measures by countries worldwide.