Food security across the world is under intensifying pressure as the war in the Middle East continues to destabilise global supply chains, the heads of three major international institutions warned this week.
The International Energy Agency, the International Monetary Fund, and the World Bank Group issued a joint statement following a meeting of a coordination group they established in early April to address the energy and economic fallout from the conflict. The institutions described the impact as "substantial, global, and highly asymmetric," with low-income energy importers absorbing the heaviest losses.
Commodity Prices Surge Amid Supply Disruptions
The war has pushed prices higher across the energy complex, including crude oil, natural gas, and fertilisers. The institutions noted that some oil and gas exporters in the Middle East have also seen export revenues erode as fighting disrupts production and transport infrastructure. "The situation remains very uncertain, and shipping through the Strait of Hormuz is yet to normalise," they said in their statement.
Even if normal shipping flows resume, the three bodies warned that global commodity supplies would take time to recover to pre-conflict levels. Fuel and fertiliser prices could stay elevated for an extended period due to infrastructure damage, creating downstream shortages of critical inputs across energy, food, and industrial sectors.
The conflict has also displaced people, disrupted employment, and reduced travel and tourism, effects the institutions said would take time to reverse. Ahead of the release of key reports—including the IEA's monthly Oil Market Report and the IMF's World Economic Outlook, both due on April 14—the three bodies said they had shared updated assessments and discussed conditions in the most affected countries.
FAO Data Shows Food Prices Rising for Second Consecutive Month
Recent figures from the Food and Agriculture Organization of the United Nations underscore the mounting strain on global food systems. Global food commodity prices rose for a second consecutive month in March, driven largely by higher energy costs linked to the escalating conflict in the Near East.
The FAO Food Price Index, which tracks monthly changes in international prices of a basket of globally traded food commodities, averaged 128.5 points in March—up 2.4 per cent from February and 1.0 per cent higher than a year earlier. While prices remain below the peak reached in March 2022, the upward trend is a source of growing concern.
"Price indices across all commodity groups—cereals, meat, dairy, vegetable oils, and sugar—rose to varying degrees, reflecting not only underlying market fundamentals but also responses to higher energy prices linked to the conflict escalation in the Near East," the FAO said.
Vegetable oil prices recorded one of the sharpest increases, climbing 5.1 per cent month-on-month and standing 13.2 per cent above their level a year earlier, as higher crude oil prices boosted demand for biofuel feedstocks. Sugar prices surged 7.2 per cent, influenced by expectations that Brazil would divert more sugarcane towards ethanol production.
Coordinated Response Underway
The three institutions said their teams are working closely at both global and country levels to deliver coordinated support, including tailored policy advice and, where applicable, financial assistance from the IMF and World Bank. "We will continue to monitor closely and assess the impact of the war on energy markets, the global economy and individual countries," the statement said, adding that coordination would extend to other international organisations to support a recovery that delivers stability, growth and jobs.