A global food crisis is "no longer a distant risk," according to a new S&P Global Institute report that links the Strait of Hormuz disruption, a diesel squeeze and a strong El Niño into one compounding shock for farmers. The October 19 paper, written by Daniel Yergin, Shankari Srinivasan, Allan Pickett and Simon Blakey, is the institute's first major report.
Roughly 29% of global urea trade normally passes through Hormuz, alongside nearly half of seaborne sulfur and about 21% of merchant ammonia, the authors said. South Asia is doubly exposed: Gulf producers supply much of India's imported urea, while LNG underpins about 85% of India's domestic urea output. In Bangladesh, four of five urea plants have stopped since March 2026 for lack of LNG.
Diesel adds a second squeeze. The crude-to-diesel spread, historically $12 to $20 per barrel, topped $100 in early September, the report said. Faced with both costs, farmers in exposed regions will either cut fertilizer application rates or plant less.
S&P Global has already trimmed its Brazil corn forecast by 6 million tonnes to 137 million tonnes and soybeans by 6 million tonnes to 177 million tonnes, with a probability-weighted soybean estimate of 168 million tonnes once El Niño and reduced phosphate use are factored in. The effect on food prices may lag until 2027, because farmers buy inputs months before selling a crop.
