Wheat and corn are the most affected.. The Iran war ignites the prices of agricultural commodities

The repercussions of the Iranian war, the ongoing closure of the Strait of Hormuz, and severe weather conditions led to the agricultural commodity price index rising to its highest level in two years, as fertilizer supply problems and crop transportation costs increased the risks of food inflation.

The index rose. "Bloomberg" Agriculture, which tracks spot prices of the world’s 10 highest-selling crops, rose for the third month in a row to their highest level since November 2023. This represents a marked turnaround from the pre-war situation, when prices for most crops were affordable supported by abundant stocks and abundant crops.

Rising Basic crop prices

is Wheatand maize are fertilizer-intensive crops, and are among the crops most affected. Wheat futures prices on the Chicago Mercantile Exchange have risen by 11% since the outbreak of war in late February, and reached their highest level in almost two years this week. Energy markets.

The price of palm oil also rose by 12% as major producers, Indonesia, Malaysia and Thailand, tend to use more of the crop in biofuel production.

Fuel costs raise food and raw material prices

The risks are not limited to grains and cooking oils only, but the conflict in the Middle East threatens to continue to raise fuel and shipping costs for various commodities, from coffee to cotton, as rising diesel prices increase the cost of transporting crops from farms to warehouses. And ports.

This month, hedge funds expressed optimism about cotton for the first time in two years, as the sharp rise in oil prices resulting from the war enhanced the attractiveness of natural fibers at the expense of synthetic fibers such as polyester and nylon. At the same time, higher raw sugar prices support Brazil, the largest exporter, increasing the proportion of ethanol in domestic gasoline.

Additional rises expected

Oscar Tiacra, senior analyst at "Rabobank" In Singapore: "War causes inflation Food prices, particularly through energy, fertilizer and shipping disruptions, with widespread global impacts emerging of late"

He added: "If the conflict continues, it could add several percentage points to food inflation over the next 6 to 18 months. Consumers may witness a gradual rise in food prices, especially basic ones."

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