Pellervo Economic Research (PTT) warns that a prolonged war in the Middle East could have major implications for food and commodity prices. The effects are expected to manifest in consumer food prices with a delay, due to the interconnectedness of market factors. Disruptions and blockages in the Strait of Hormuz, a crucial passage for oil and fertilizer shipments, would lead to increased prices for both oil and these essential inputs for agriculture.

The rise in oil prices would impact food costs through various channels, including increased transportation and logistics costs, agricultural production inputs, packaging, processing, and the complexity of global supply chains. Energy prices, if sustained at high levels, would particularly affect crop and livestock production, as the agricultural sector heavily relies on energy, fertilizers, and feedstocks. If the conflict were to end soon, however, there might be a stabilization in oil and gas prices, reverting closer to previous levels after significant fluctuations in the market.

The report highlights the critical nature of energy and raw material prices in maintaining food security. Policymakers and consumers alike need to be aware of the potential for price spikes in essential goods, stressing the importance of monitoring the geopolitical landscape and its potential economic repercussions that could affect everyday life.