World Farming Agriculture Commodity news - Weekly Updated - Exclusive and very popular - Delivering a Media service 365 days of the year. - Over 11,000 readers per week.
The current conflict in the Middle East is sending far-reaching shock waves through global food and agribusiness sectors. The disruption to shipping in the Strait of Hormuz is rapidly driving up oil, gas, and refined product prices, with effects cascading through fuel, power, logistics, and industrial input costs. In addition, the Middle East is a key hub for fertilizers, petrochemical feedstocks, food and agricultural trade, and global logistics. The effects are felt throughout the entire value chain, including consumers.
Overall, the conflict introduces a multilayered global risk environment, with the potential for both short-term volatility and longer-lasting structural impacts on supply chains, pricing, and margins across the global food and agribusiness system.
The escalation of conflict in the Middle East, and its effects on shipping and access to the Strait of Hormuz, has increased cost pressures across global food and agricultural supply chains, primarily through higher energy and fertiliser prices.
Early increases in crude oil and urea prices are already flowing through to higher diesel and fertiliser costs in Australia, adding to margin pressure for farmers and processors. There is a real risk that refined fuel prices could rise further as Asian refineries cut back on production runs due to shortages of crude.
Global grain supply rose in 2025 and tightened farmer margins, so for the grains and oilseeds sector, this is an added headwind.
Urea markets are particularly exposed, with around 30% of global exports potentially at risk from disruption to flows through the Strait of Hormuz and from reduced ammonia availability, as 20% of global exports pass through the strait.
Beyond inputs, the Middle East is also an increasingly important destination for processed goods from Australia, such as milk powders, as well as live sheep exports and sheepmeat. Approximately 90% of Australian live sheep exports are to the Middle East region and in most cases also require shipping through the Strait of Hormuz. Canola might be one of the few Australian farm products that could see prices rise as its use in biofuel production allows prices to benefit from increased fossil fuel prices.
While the scale and duration of impacts remain uncertain, the conflict underscores the vulnerability created by highly interconnected global energy, fertiliser, and food supply chains, with multiple order impacts in the global supply chains. The duration of the conflict will be key in determining whether recent price increases remain temporary or persist for longer across the economy.
For Australia as a whole, the conflict is likely to lead to higher inflation and – depending on severity – could prompt the RBA to raise interest rates sharply to bring aggregate demand back into alignment with lower aggregate supply. This makes recession likely in some scenarios.
In extreme downside scenarios, where supply cannot be materially reestablished, a government imposition of price controls and rationing becomes probable.
World Farming Agriculture and Commodity news -16 March 2026
The Institute of Geography and Statistics’ (IBGE) latest data reports that Brazil had 5.5 million unemployed people in the fourth quarter of 2025, representing a 5.1% unemployment rate.
However, there are an additional 2.6 million people that have stopped looking for work. The total underutilised rate for the fourth quarter of 2025 was 13.4%. Other factors, such as high interest rates, tariffs and taxes, fiscal uncertainties, and regulatory issues, all weigh on producers’ capacity to make investments, manage risk, and make decisions related to production.
The war in the Middle East has reduced Kenyan meat exports to the region to below 5% of the expected level during the peak Ramadan season as a sharp increase in air freight costs grounds shipments, Reuters reported, citing industry officials.
The Middle East is Kenya's main market for meat exports, with the United Arab Emirates traditionally accounting for 40% to 60% of shipments, Nicholas Ngahu, chief executive of the Kenya Meat and Livestock Exporters Industry Council, said.
But exporters of fresh chilled meat such as beef, lamb, mutton and goat are currently only able to send limited volumes to Abu Dhabi and Dubai, while exports to markets such as Oman, Kuwait, Bahrain and Jordan have also been disrupted.
"We are doing below 15% of our normal exports, and now that it's Ramadan, we are doing less than 5% of what we are supposed to be doing," Ngahu said.
Air freight costs surge
Kenya typically sends around $2.3 million worth of meat and animal products to the Middle East every week.
Dennis Muraya, director of Konza Clearing Agency, said most airlines serving the region had cut operations, forcing exporters to rely on costly cargo charters into the UAE.
"We usually pay $1 to $1.50 per kilo," Muraya said. "But at the current moment, we're even paying up to $3 to $3.50 per kilo."
He said airlines had attributed the surge in rates to higher insurance costs linked to the conflict.
Ngahu said the industry would normally ship around 200 metric tons of meat a day during the holy month, but volumes had fallen to roughly 5 to 15 tons a day.
Since Sunday, March 8, exports would have been expected to total a million kilograms, Ngahu said. "We have not done even 50,000."
One consignment of about 20 tons on its way to Sharjah had to be sent back on February 28 as airspace closed, saddling Konza with a $5,000 bill for handling, storage and cold-room charges, Muraya said.
Ripple effect
Exporters say the impact is rippling through the supply chain, from freight forwarders and slaughterhouses to livestock traders and farmers.
With shipments delayed, slaughterhouses are unable to clear meat quickly enough to make room for new stock, while some exporters are forced to divert meat to the local market at lower prices. Ngahu said some abattoirs had cut casual labour by as much as 80%.
If the conflict drags on beyond Ramadan, Muraya warned demand could weaken further, making freight costs unsustainable.
"If this war continues, we won't be in business," he said.
The views and opinions expressed in this program are those of the writers and do not necessarily reflect the views or positions of any entities they represent. The information contained in this website is for general information purposes only. The information is provided by CRA and while we endeavour to keep the information up to date and correct, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to the website or the information, products, services, or related graphics contained on the website for any purpose. Any reliance you place on such information is therefore strictly at your own risk.
