A partner with Polar Pork says farmers remain hopeful that the conflict that has affected the movement of goods through the Straight of Hormuz will soon be resolved. The war in the Middle East that has impacted the movement of goods through Straight of Hormuz has dramatically impacted the availability and cost of agricultural inputs including fuel and fertilizer.
Florian Possberg, a partner with Polar Pork, says the pork sector has enjoyed relatively low feed costs but the Middle East is a major producer of nitrogen fertilizer an incredible amount of fertilizer passes through the Straight of Hormuz and if there is an interruption in the use of fertilizer it's not inconceivable we could see a significant drop in crop and grain production.
Quote-Florian Possberg-Polar Pork:
I think at this point the belief is that the conflicts can be resolved and things can get back to normal.However, we keep hearing that the war, particularly the one causing the restriction of ships moving through the straight of Hormuz, we keep hearing that that's resolved and then we find out it's not resolved.
How long will this continue, is it going to escalate and cause further long-term disruptions or will it be resolved and it's a real question that has serious consequences.
We'll wait and see.Maybe things will be OK or maybe we'll have a new reality.Over the next six month to 12 months, we're going to find out and we just hope for the best.
Possberg says if this disruption continues, we could see a significant shortage of grain and thereby explosive food costs.He says when everything is normal farmers can produce enough food for everyone but if there's a disruption in fertiliser use and crop production, it could have very serious consequences.
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