KARACHI: The Exchange Companies Association of Pakistan (ECAP) has raised alarms regarding the escalating global conflict involving Iran, cautioning that the effective closure of the Strait of Hormuz has significantly elevated global oil prices, creating a potential crisis in international food security.
According to Exchange Companies Association of Pakistan, ECAP Chairman Malik Muhammad Bostan noted in a statement issued on Thursday that the suspension of traffic through this strategic maritime chokepoint has severely impacted the fertilizer supply chain. "The disruption of this route is not merely an energy crisis; it is a direct threat to global agriculture," Mr. Bostan stated. The Gulf region is a major supplier of urea and other essential fertilizers to key economies, including China, the US, Australia, and Indonesia. With the planting season beginning in the Northern Hemisphere, a nutrient shortage could result in significantly reduced yields for staple crops such as wheat, rice, corn, and soybeans.
Addressing the impact on Pakistan, Mr. Bostan warned that a prolonged blockade could triple Pakistan's oil import bill and push national inflation to the 15%-17% range. He praised the government's proactive measures and the Pakistan National Shipping Corporation's role in maintaining the country's energy supply during the regional maritime tension. He urged Pakistani importers and exporters to prioritize national shipping services to decrease reliance on foreign carriers and enhance maritime self-sufficiency.
The statement further detailed a worsening situation in the fertilizer sector, noting significant production halts as major regional producers, including QatarEnergy, have reportedly scaled back or halted operations at large urea plants due to gas supply interruptions and shipping risks. Urea prices have already increased by 40% to 50%, with the US experiencing a supply deficit of nearly 30%. As regional factories shut down, the shortage is expected to manifest in higher global food prices and potential scarcity in vulnerable nations.
Mr. Bostan remarked that the current conflict underscores the risks posed by regional instability to global peace. He observed that US public opinion seems increasingly wary of further escalation, with growing domestic pressure on the Trump administration to seek a ceasefire. He further noted that the crisis has paradoxically allowed Iran to demonstrate its strategic endurance and establish its presence as a pivotal regional power. Concluding his statement, the ECAP chief called for immediate diplomatic efforts to end the Iran-US-Israel hostilities, while urging the Pakistani government to implement robust contingency plans to protect the economy from further external energy shocks.
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