Food giants were starting to cut prices. Then the war began.

UK food inflation sat at 3.8% in February 2026, the lowest rate in nearly two years. Australia's food prices were growing slower than wages for the first time since 2023. American households had spent 29% more on groceries than before Covid, but at least the number had stopped rising every month. Grocery prices across developed economies had finally stabilized.

The Iran war closed the Strait of Hormuz in late February. Around one-third of the global seaborne fertilizer trade passes through that waterway along Iran's southern border, according to the United Nations.

Shipping traffic through the strait has dropped to near zero since the war began, with vessels carrying fertilizer from Qatar, Saudi Arabia, and Bahrain sitting in port with nowhere to go and export facilities unable to move product. Farmers in the Northern Hemisphere are entering planting season without access to the fertilizer their crops need.

The UK's Institute of Grocery Distribution had forecast food inflation would average 3.3-4.3% for 2026 in its November baseline. IGD published revised scenarios on March 25. Food inflation lifts to 4.8% under a moderate energy shock. An intense shock pushes it to 6.4%. Some analysts now think 8% is possible by mid-2026.

"Higher energy and input costs risk reigniting global food inflation just as retail food prices had returned to more historical levels in many countries," the International Food Policy Research Institute said.

Farmers can't skip nitrogen

Dawid Heyl, co-portfolio manager for the global natural resources strategy at Ninety One, told CNBC that nitrogen fertilizer goes on fields during planting season. Yields drop later in the year if it doesn't.

"You can skip a season of potash, you can skip a season of phosphates, but you can't skip a season of nitrogen," Heyl said. "There's a direct correlation to your nitrogen application and your agricultural yield in the end. That's why I'm a lot more concerned about the current crisis than I was when Russia-Ukraine happened four years ago."

Egypt's FOB granular urea, a bellwether nitrogen fertilizer, jumped from $400-490 per metric tonne before the war to around $700 now, according to CRU. Ammonia prices are up 20%. Potash and sulfur have also risen.

Iran is one of the largest exporters of nitrogen fertilizers globally. Qatar, Saudi Arabia, Bahrain, and Iran together supply much of the world's traded urea and phosphates. Virtually all of it transits the Strait of Hormuz.

Chris Lawson, vice president of market intelligence and prices at CRU, told CNBC the strait closure has removed around 30% of exportable supply from the market.

"With the Strait of Hormuz essentially cut off, there's a big chunk of global trade that isn't able to move right now," Lawson said. "We estimate around 30% of exportable suppliers are not really available to the market right now."

Africa and Asia hit hardest

Persian Gulf economies like Qatar, Bahrain, Kuwait, and Saudi Arabia rely heavily on food imports shipped through Hormuz. Supplies get rerouted overland or by air at far higher cost if shipping stays constrained.

Rabobank analyst Carlos Mera said all countries around the Persian Gulf west of Hormuz will struggle to get food imports during short-term shortages, with Iraq and Iran itself also facing scarcity.

Sub-Saharan Africa faces the greatest risk, with over 90% of fertilizer consumed in the region imported, according to University of Texas data. Households in the region spend 50-60% of income on food.

Raj Patel, a research professor at the University of Texas, said Sub-Saharan Africa is the most vulnerable region to fertilizer disruptions. The Strait of Hormuz is a fertilizer chokepoint, with Qatar, Saudi Arabia, Oman, and Iran together supplying major volumes of urea and phosphates, and virtually all of it transits Hormuz.

Maize is a staple crop across Sub-Saharan Africa, and nitrogen-intensive crops like maize are especially sensitive to fertilizer shortages that lead to lower harvests and higher food prices.

India, Bangladesh, Thailand, and Indonesia in South and Southeast Asia rely heavily on imported fertilizers from the Gulf. Disruption during key planting seasons drives up costs for farmers.

Patel said a farmer in Thailand who is 90% import-dependent faces a cost shock on every dimension simultaneously. Urea is made from gas, shipped through Hormuz, and priced in dollars that are strengthening from geopolitical risk.

Brazil imports around 85% of its fertilizer. A prolonged disruption during Brazil's key import season could ripple through global soybean and maize markets.

Energy prices ripple through supply chains

Joseph Glauber, a senior research fellow at IFPRI, said energy prices will have a bigger impact on consumer prices than agricultural commodities. Energy is a major portion of the total retail food bill.

Energy powers farm machinery, produces fertilizers, transports crops, and processes them into food products. Higher fuel prices feed through the entire supply chain. Crop output can stay stable in the near term and rising energy costs alone will still drive food inflation higher globally.

UK motor fuel prices have already risen. The Office for Budget Responsibility and Bank of England's Monetary Policy Committee have both flagged the risk that all-items inflation could exceed previous forecasts.

IGD said a major share of UK food inflation in 2026 was already expected from policy, including business rate changes, Extended Producer Responsibility, National Living Wage increases, and Employment Rights Act costs. The war adds to pressures that were already locked in.

"Even if inflation eases in 2027, food prices will continue to rise, just at a slower pace than before," IGD said. "Even in the baseline no-war scenario, food prices at the end of 2026 could easily be around 45-50% above pre-Covid levels."

US farmers wrote to Trump

A total of 54 US agricultural groups wrote to President Donald Trump on March 20 calling for "much-needed market relief for America's farmers." Planting season had begun in earnest across much of the US as the closure of the Strait of Hormuz sent fuel and fertilizer prices skyrocketing.

"Maritime freight disruptions from the ongoing conflict in Iran pose major consequences to food security here at home and around the world," the groups wrote.

Around a third of nitrogen, phosphate, and potash fertilizers used in the United States are imported, according to the U.S. Fertilizer Institute.

Heyl said fertilizer costs are going to be inflationary for the farmer. Some regions might not be able to get their hands on the fertilizer at all and will have to ration.

China restricts exports

China, another large fertilizer exporter, has put restrictions on exports to protect its domestic market from shortages, Reuters reported last week.

QatarEnergy announced it would stop downstream production of urea after deciding to bring liquefied natural gas production to a halt.

Sarah Marlow, global head of fertilizer pricing at Argus, told CNBC that almost 50% of all globally traded sulfur comes from the Middle East region affected by the war. Around a third of globally traded urea comes from that region. Ammonia is close to 25%.

"It's very major, and more major in some ways than the impact of Ukraine," Marlow said. "It is affecting multiple producers."

What households can do

Shoppers can buy staples in bulk when prices are lower. Comparing unit prices rather than package prices helps. Reducing food waste stretches budgets further.

Individual actions don't solve structural problems. UK food prices could be 45-50% above pre-Covid levels by the end of 2026 even in the no-war scenario. Adding the war means cumulative inflation hits households already in a weaker financial position than they were in 2022.

Lower inflation doesn't mean lower prices. Prices are still rising, just slower than before.

Chris Barrett, an agricultural economist at Cornell University, said the scale of any price shock will depend heavily on how long shipping disruptions persist.

President Trump said on March 29 that Iran had agreed to "most of" a 15-point list of US demands to end the war, though Iran signaled skepticism last week as diplomatic efforts continue. The Strait of Hormuz stays closed, and how long it stays closed determines how bad grocery price inflation gets.