Asia-Pacific Food Security Risks Rise Amid Middle East Conflict

The Asia-Pacific (APAC) region will likely face worsening food security dynamics through to 2027 if the ongoing conflict in the Middle East between the United States and Iran persists for several more months. For the agricultural sector, APAC is highly dependent on the Middle East, not just for fuel for its farming operations but also for roughly 40 percent of its fertilizers. Within the first five months of 2026, fertilizer prices increased 35 percent compared to last year.

It is assessed that severe food shortages are unlikely across the APAC region in 2026, given sufficient government rice and grain stockpiles. However, if the Middle East conflict continues unabated, the region will likely witness lower supplies from this harvesting season (which ends in December) and higher agricultural prices. South Asia will likely be most impacted as it has large populations, high food-price sensitivity, heavy fertilizer use, and varying degrees of reliance on imported fuel and fertilizers. 

Producers of rice, flour, edible oils, sugar, and processed foods are likely to face rising raw material and transportation costs through to 2027, putting pressure on operating margins. Sustained increases in agricultural commodity prices are likely to increase production costs across packaged foods, beverages, animal feed, and consumer staples.

Even if crop production meets required levels, the rising fuel prices will make it much more costly to move them from the fields to the processing plant and between countries. Crop supplies may technically be sufficient, but logistical complications may prevent them from reaching their intended destination.

After the first quarter of next year, prolonged fertilizer shortages and elevated production costs could reduce agricultural output, increase reliance on government support, and encourage changes in crop selection and production practices. As agricultural output in the APAC region declines, governments will begin to contemplate policy measures to enhance their food security. 

If food security worsens severely next year, it will likely lead to growing tensions between local populations and their respective governments in the APAC region. Social unrest has increased in recent years due to the government’s inability to address socio-economic issues affecting its population, including job shortages, inadequate government subsidies, and corruption.

South Asia has already experienced the overthrow of three governments due to socio-economic grievances, including in Sri Lanka in 2022, Bangladesh in 2024, and Nepal in 2025. The increase in food insecurity alongside dissatisfaction with governments will likely create a more volatile security environment across the region, as protests become more frequent and the risk of violent clashes between authorities and local groups increases. Rising social unrest may increase the risk of looting and arson attacks against institutions and companies perceived as hoarding food supplies. 

To mitigate risks of internal food insecurity, governments across APAC may implement austerity measures to protect domestic markets. China has already begun imposing export restrictions and quotas on fertilizer materials such as ammonium sulfate and banning the export of certain nitrogen-potassium blends. India has historically imposed export bans on agricultural products, such as rice, during economic downturns, thereby affecting the food security of its neighbors.

If major APAC countries like China and India were to impose stricter export controls on food and fertilizers, it would likely compound food security risks, prompting other countries in the region to impose similar export bans to protect their domestic food supplies. This will likely lead to a ripple effect in which one country's austerity measures trigger greater food insecurity in another, forcing the affected country to implement austerity measures of its own. Without regional governance and a coordinated strategy to mitigate these issues, there is a risk of a chain reaction that will be difficult to stop, as it requires domestic stability as well as stability in global fuel and fertilizer markets.  

Today, with the continuing armed conflict in the Gulf region involving the US, Iran, and other Middle Eastern countries, the projected impact on agricultural output in the APAC region over the next two years is as follows:  

In 1-3 Months  

• Distributors are likely to face supply shortages, longer procurement lead times, and increased price volatility, particularly where Chinese fertilizer export controls coincide with reduced Middle Eastern supply.  

In 3-6 Months  

• Producers of rice, flour, edible oils, sugar, and processed foods are likely to encounter rising raw material and transportation costs, placing pressure on operating margins.  
• Sustained increases in agricultural commodity prices are likely to increase production costs across packaged foods, beverages, animal feed, and consumer staples.  
• Companies that stockpile agricultural products are at risk of experiencing heightened levels of arson and looting as demonstrators may attempt to obtain food supplies during heightened food insecurity.  

In 6 Months Onward

• Prolonged fertilizer shortages and elevated production costs could reduce agricultural output, increase reliance on government support, and encourage changes in crop selection and production practices.  
• Companies may face increased market intervention through export restrictions, import controls, and government procurement programs, reducing supply chain predictability. 

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