The Iran war has disrupted transportation in the Strait of Hormuz, causing energy and fertilizer prices to soar, and impacting rice planting and production in Asia, leading to a rapid increase in rice prices.
Bloomberg reported on Wednesday (April 15) that the price of Thai white rice 5% broken, a benchmark for Asian rice prices, rose to USD 423 per ton (approximately SGD 538) in the week ending April 8, marking a 10% increase, the largest rise since August 2023.
The Middle East is one of the key production areas for fertilizers such as urea, diammonium phosphate, and anhydrous ammonia, with Qatar, Saudi Arabia, Bahrain, and Oman collectively producing about 15 million tons annually.
The Strait of Hormuz remains closed to navigation, not only blocking the transportation of oil and gas products from Gulf countries but also causing a significant backlog of fertilizer products and a notable increase in market prices.
Additionally, Asian rice farmers also rely on diesel fuel for agricultural machinery such as tractors, irrigation pumps, and rice transplanters.
<h3>Thai Farmers Say Profits Do Not Cover Costs, Some Have Suspended Rice Planting</h3>
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With the rising prices of energy and fertilizers, Oscar Tjakra, a senior commodity analyst at Rabobank, stated that some Thai farmers have even halted rice cultivation because the profits from rising rice prices are insufficient to cover the increased costs.
According to data from the US Department of Agriculture, Thailand is the world's third-largest rice exporter.
Tjakra added that the prolonged dry season has exacerbated farmers' difficulties, leading to a significant reduction in rice production and tightening the current rice supply. Meanwhile, the conflict in the Middle East has increased transportation costs and insurance fees, further driving up rice prices.
US President Trump stated that he might be prepared to gradually end the war with Iran, and the US and Iran may start a new round of negotiations as early as this week. However, both sides still face many differences in negotiations, and it will take time for the Strait of Hormuz to fully restore passage, making it difficult for oil and fertilizer prices to quickly decline in the short term

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The Iran war has led to disruptions in transportation through the Strait of Hormuz, causing energy and fertilizer prices to soar, and impacting rice production in Asia, resulting in a rapid increase in rice prices. The price of Thai 5% broken white rice rose to USD 423 per ton in the week ending April 8, marking a 10% increase, the largest rise in 2023. The Middle East is an important fertilizer production area, and the blockade of the Strait of Hormuz has caused fertilizers to be stranded, significantly increasing market prices. Farmers are facing rising costs, and some have suspended rice planting

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The Iran war disrupts the rice production supply chain, causing Asian benchmark rice prices to rise by 10% | Lianhe Zaobao