JAKARTA - The chief economist of the Food and Agriculture Organization of the United Nations (FAO) warned on Thursday, it will take months to recover the global market affected by the Hormuz Strait crisis, even though the conflict in the Middle East region will soon end.
"If the conflict stops today, it will take two to three months to stabilize these costs," said FAO Chief Economist Maximo Torero during a virtual briefing on the conflict in the Middle East and its implications, reported by Anadolu (27/3).
Furthermore, Torero said, the conflict "has triggered one of the fastest and most severe disruptions to global commodity flows in recent times," adding "in a matter of days, traffic through the Strait of Hormuz plummeted by 90 percent, while the route usually transports 20 million barrels of oil per day."
"That's 35 percent of crude oil, along with a fifth of the world's LNG gas, and up to 30 percent of international fertilizer trade," he said, stressing the relevance of the strategic channel for global food security.
Pointing to a clear timeline of consequences depending on how long the crisis lasts, he explained: "If everything is resolved in the next two weeks, the market will absorb it, and it will minimize the potential risk of food insecurity in the world in the next growing season, or the potential risk of economic impact."
"If this crisis continues for three to six months, then yes, it will have an impact, not only on the food security sector, but of course, energy will have an impact on all other sectors and other inputs," he said.
Torero also highlighted the vulnerability of countries that are highly dependent on remittances from Gulf workers, calling Nepal, Jordan, Lebanon, Pakistan, Egypt, and Sri Lanka countries where most of the GDP could be at risk.
Workers in the region "will lose their jobs and of course they will not be able to send their remittances," Torero warned.
He further named Turkey and Jordan as countries at high risk due to their crop calendars and "import dependence," with Lebanon also facing increasing difficulties.
Urging a quick resolution, Torero stressed "the market will absorb because we have enough food in the market," if the conflict ends in the next week or two.
"But we have to be realistic; if this continues for a longer period of time, the situation will be very worrying," he said.
Responding to Anadolu's question about the impact of climate-related disasters in addition to the ongoing conflict in the region, Torero warned of a combination of factors that could potentially cause disasters if El Nino - a climate pattern that causes unusually warm ocean temperatures and extreme weather around the world - occurs while the conflict continues.
"If El Nino occurs and is strong, then the combination of these factors, climate effects, coupled with increasing input costs, will significantly worsen the situation," he said.
It is known that the US and Israel launched air raids against Iran in a campaign called Operation Epic Fury (US version) or Operation Roaring Lion (Israeli version) since February 28, which has so far killed more than 1,340 people, including the then Supreme Leader, Ali Khamenei.
The Mullah's country retaliated with drone and missile attacks targeting Israel, along with Jordan, Iraq, and Gulf countries hosting US military assets, causing casualties and infrastructure damage and disrupting global markets and flights.
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