Iran war to spike US grocery costs, threaten global food crisis

President Donald Trump’s war against Iran has already been raising gas prices for US drivers, and could soon raise the cost of food both in the US and all over the world.

NBC Newsreportedon Tuesday that the price of diesel fuel has now soared above $5 per gallon for the first time since December 2022. If the price of diesel remains high, the report explained, it will raise the price of all goods delivered by trucks throughout the US, including food.

Paul Dietrich, chief investment strategist at Wedbush Securities, told NBC News that diesel prices will become a “direct hit on consumer prices” if they remain elevated, as “groceries get more expensive, delivery costs rise, and household budgets are tightened.”

“Diesel is what moves the real economy,” explained Dietrich. “It hauls the food, the packages, the building supplies, and the inventory sitting on store shelves.”

The cost of diesel isn’t the only factor that could spike food prices, as the Iran war has also put a strain on fertilizer that farmers need to grow crops.

Al Jazeerareportedon Wednesday that there is growing concern that the rising price of fertilizer caused by the closure of the Strait of Hormuz could lead to a global food crisis.

As Al Jazeera explained, almost half of the global supply of urea, the most commonly used fertilizer, is shipped from Middle Eastern nations through the Strait of Hormuz.

With the strait closed by Iran in response to US and Israeli attacks, Al Jazeera wrote, “urea export prices from the Middle East have surged by about 40%, rising from just less than $500 to a little more than $700 per metric ton as of last Friday.”

Al Jazeera also cited an estimate from data and analytics firm Kpler projecting that up to one-third of the global fertilizertradecould be disrupted if the strait remains closed for a prolonged period.

Carl Skau, deputy executive director and chief operating officer of the World Food Program, warned on Tuesday that the Iran war could push millions of people into extreme hunger should it persist.

“If this conflict continues, it will send shockwaves across the globe, and families who already cannot afford their next meal will be hit the hardest,”saidSkau. “Without an adequately funded humanitarian response, it could spell catastrophe for millions already on the edge.”

WFP said the disruption in fertilizer markets offers “the most recent proof that conflict is the number one driver of hunger.”

“Conflict forces people from their homes, destroysinfrastructure, fuelsinflation, and wipes out jobs,” said the agency. “All of this makes it nearly impossible for people to find or afford enough food to survive. Andchildrenare always hit hardest: A child living in a country ravaged by conflict is more than twice as likely to be malnourished and out of school than their peers in peaceful settings.”

Warnings about the war’s impact on the price of food come as the US economy is showing signs of accelerating inflation.

Asreportedby CNBC on Wednesday, wholesale prices in February surged by 0.7%, more than double economists’ consensus estimate of 0.3%.

On a year-over-year basis, wholesale prices rose by 3.4% in February—the highest increase in a year.

Spikes in wholesale prices, which reflect the amount that firms pay for inputs for their products, typically also lead to increased consumer prices, as companies pass on their cost increases to customers.

“The report suggests that pipeline inflation pressures remain persistent, particularly on the services side, complicating the Fed’s path as it weighs how long to keep interest rates elevated,” CNBC noted.

Originally published by Common Dreams, this article is republished under Creative Commons license.