THE Department of Agriculture (DA) is closely monitoring developments in the Middle East following a reported US airstrike on Iran, warning that a prolonged escalation could transmit higher fuel, fertilizer and freight costs to the Philippine farm sector.
In a statement, Agriculture Secretary Francisco P. Tiu Laurel Jr. said the agency is assessing potential spillover effects from rising geopolitical tensions, particularly if they disrupt global oil flows passing through the Strait of Hormuz — a key shipping lane that carries a substantial share of the world’s crude supply.
Any disruption in the corridor has historically triggered spikes in global oil prices, tightening energy markets and amplifying volatility across commodity supply chains.
“We are concerned about the intensifying conflict between the US and Iran as it might increase oil prices over an extended period, affecting petroleum-based fertilizers, freight costs, and the fuel that powers the machinery our farmers use and the boats our fishermen rely on,” Tiu Laurel said.
For the Philippines’ import-dependent agricultural system, the transmission channels could be immediate.
Fertilizer prices are closely linked to energy markets, particularly nitrogen-based products derived from natural gas. A sustained rally in oil and gas prices would likely raise farm input costs at a time when producers are working to stabilize output and manage weather-related risks.
Freight rates also present a pressure point. Higher bunker fuel costs could push up global shipping rates, increasing the landed cost of imported staples such as wheat and animal feed. This may, in turn, lift retail prices of bread, poultry and pork, complicating the government’s efforts to keep food inflation in check.
“We have seen this during past oil shocks, and we are now looking at ways to manage the impact on our food systems and on the country’s food security,” Tiu Laurel said. “We have to balance fiscal prudence with the welfare of our food producers and consumers.”
While global markets have yet to fully price in a worst-case scenario, the DA’s heightened vigilance highlights the vulnerability of domestic agriculture to external shocks. In an interconnected food system, sustained geopolitical tensions can quickly reshape local cost structures and test supply chain resilience. / KOC