Fuel shortages from Iran war threaten Asia’s biggest food staple

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BANGKOK - Harvest-ready rice fields are lying idle, and farmers are deciding whether to skip planting for the coming season, as spiking fuel and fertiliser costs from the war in the Middle East hit one of the world’s biggest rice-growing regions.

Across South-east Asia, tens of millions of smallholders are struggling to find affordable crop nutrients as well as the diesel needed to run tractors, irrigation pumps and rice planters.

In Thailand, some farmers are leaving the crop in the ground as it is too expensive to harvest.

The scarcity of supplies underscores how the six-week war in Iran has upended global trade and raised concerns around food shortages.

As well as driving oil prices higher, the near-closure of the Strait of Hormuz – which remains largely blocked despite a temporary ceasefire – has choked a vital route for fertiliser and fuel deliveries, with Asia particularly affected.

“There’s a lot of panicked farmers,” said Mr Patrick Davenport, director and co-founder of BRM Agro, an integrated rice farmer and miller in Cambodia, where roughly three-quarters of the population lives in rural areas. “Most are involved in agriculture – and they’re all hurting.”

Rice is a staple for more than half of the world’s population, as well as a livelihood for rural communities across a region where agriculture still accounts for a large share of economic activity. Farmers struggling with input costs that have doubled or even tripled are also finding themselves squeezed by persistently low prices, at least for now.

Weighed down by ample inventories, benchmark prices for Thai white rice 5 per cent broken fell to a decade-low in late October and have recovered only a little since then, spending most of last month below US$400 (S$509) a tonne.

“Margins are super tight, and that means they will plant less,” said United Nations’ Food and Agriculture Organization chief economist Maximo Torero. He noted that a further 20 to 30-day closure of the Strait of Hormuz would affect the availability of food as early as the second half of 2026.

The input shortages can only be resolved if vessels can begin moving through the strait again.

“I don’t see any other solution,” he said.

In Cambodia, some growers are reluctant to proceed in April without a guaranteed return, said Mr Davenport, whose company works with about 2,000 farmers. Around a 10th have said they will not plant unless they can secure a fixed price for the new crop.

In the Philippines, the world’s top rice importer and also a major producer, paddy rice output could fall by at least 10 per cent in 2026, according to Mr Raul Montemayor, national manager for the Federation of Free Farmers Cooperatives. That could amount to about 2 million tons of lost rice, given the projected national output of 20.3 million tonnes.

“That’s a very big possibility, and the reduction will be felt during the next harvest season in September or October,” said Mr Montemayor.

The shortage of inputs could not have come at a worse time for rice farmers in South-east Asia, many of whom grow two or more crops a year and are currently straddling the seasons.

Harvesting of dry-season fields is in progress, while planting is beginning for the main wet-season paddy crops in Thailand and the Philippines.

“That’s when all these fuel costs start mattering a lot. Fertiliser costs will matter a lot. Availability will matter a lot,” said Dr Alisher Mirzabaev, senior scientist for policy analysis and climate change at the International Rice Research Institute. “On the food security side, we are buffered by the existing stocks – but we should not get complacent.”

Elsewhere in Asia, the main plantings in India – a major grower – remain a couple of months away, while China has been more insulated from the energy and fertiliser shocks.

But in Vietnam’s Mekong Delta, where rice is grown three times a year, farmers are barely breaking even as they collect the main paddy crop.

With production costs surging, some growers are considering scaling back to just two crops, said 63-year-old Pham Van Nhut, a farmer in the southern province of Vinh Long.

Some farmers in Thailand, meanwhile, have chosen not to harvest the rice crop that is ready now or are delaying collection, leading to a decline in quality.

The dry-season crop in March-April could fall by around 19 per cent from the same period in 2025, according to a March 31 report by the Bangkok-based Kasikorn Research Center.

Planting for the 2026 main crop in Thailand is due to start in weeks, and while it is unlikely that growers will halt production entirely, output will be limited by how much fertiliser can be procured, said Mr Pramote Charoensilp, president of the Thai Agriculturist Association, which represents tens of thousands of farmers across much of the country.

With the disruptions set to last, farmers are seeking creative ways to reduce their dependence on imported fertilisers and fuel.

Some are switching from rice to corn, which needs less water from diesel-fed irrigation machines.

BRM, the company in Cambodia, is accelerating plans to scale up bio-organic fertiliser production and seeking suppliers of electric tractors and solar-powered water pumps to reduce fuel use.

But options are limited for many others who depend on rice for their livelihoods, leaving them little alternative but to continue planting – even if that means absorbing losses.

“We have no choice,” said Mr Ruel Bantugan, a rice farmer in the Philippines’ Bataan province.

“We just need to gamble and plant again, rather than leave the land idle.” BLOOMBERG