The Exchange Companies Association of Pakistan (ECAP) has raised concerns about the escalating global conflict involving Iran, noting that the closure of the Strait of Hormuz is driving up oil prices and threatening international food security.

ECAP Chairman Malik Muhammad Bostan stated that the suspension of traffic through this vital chokepoint has jeopardised the fertiliser supply chain. The Gulf region is a key supplier of essential fertilisers to major economies, and a nutrient shortage during the Northern Hemisphere’s planting season could reduce yields of staple crops like wheat and rice.

For Pakistan, Bostan warned that an extended blockade could triple the oil import bill and push inflation to 15%–17%. He praised the government’s proactive measures and the Pakistan National Shipping Corporation’s role in maintaining energy supplies.

The fertiliser sector is facing critical issues:

– Major producers, such as QatarEnergy, have reduced or halted operations due to gas shortages and shipping risks.

– Urea prices have surged by 40% to 50%, with the US experiencing a significant supply deficit.

– These shortages could lead to higher food prices globally, particularly affecting vulnerable nations.

Bostan emphasised the need for diplomatic efforts to resolve the Iran-US-Israel conflict and urged Pakistan to develop contingency plans to mitigate external energy shocks.