As the Iran war drags on, food supply and demand are being disrupted around the world. The war has destabilized supplies of essential inputs such as fuel and fertilizer needed for the production and distribution of agricultural products.
On the 1st (local time), Bloomberg reported that Australia's winter wheat harvest is estimated at 26.7 million tons (t). That is down 26% from a year earlier. A reduction in planted area is cited as the main reason for the lower output. The winter wheat planting area was 10.9 million hectares (ha), the smallest since the 2019/2020 season.
Australia is one of the world's largest wheat exporters and a major supplier to China as well as Southeast Asian and Middle Eastern countries. About 30% of Korea's wheat imports also come from Australia. As a result, Australia's lower wheat production is expected to affect wheat supply in Asia.
Australia's agriculture ministry said the four-month war between the United States and Iran has caused "significant disruptions" to global fuel and fertilizer supplies. With drought persisting around the world, the protracted Middle East war is adding to farmers' burdens and fueling a decline in wheat production, according to the analysis.
In Japan, signs are emerging that a banana shortage could become a reality. Bloomberg said that "Japan is increasingly likely to fall into a banana shortage," calling it "the latest example of supply disruptions linked to the Middle East conflict."
In Japan, 99.9% of bananas consumed are imported. To prevent pests and the like, Japan brings in bananas unripe and then ripens them domestically using ethylene gas for sale. But the Iran war has disrupted supplies of naphtha, the feedstock for ethylene production, affecting the ripening process.
According to the preliminary April trade statistics released last month by Japan's finance ministry, Japan's naphtha imports fell 47% year over year to 1.14 million kiloliters. Akashi Eiji, secretary-general of the Japan Banana Importers Association, said it is "the worst naphtha shortage in 50 years."
For now, bananas are being supplied to stores normally, and some importers are said to have secured enough ethylene to last about two to three months. However, with the Iran war causing a surge in expenses related to petrochemical products such as fuel, packaging materials, and transportation costs, retailers are facing heavier burdens, raising concerns that this could ultimately lead to higher consumer prices.
Other fruits with high import shares that require post-ripening, such as avocados and kiwifruit, could also be affected by supply disruptions. These fruits are known to require far less ethylene gas than bananas. Bloomberg noted that "Japan's vulnerability stems from a lack of domestic oil resources and the absence of international pipelines to offset disruptions to maritime transportation."