The ongoing conflict in the Middle East is putting more pressure on fragile agrifood systems and global supply chains, according to a World Grain report quoting the director-general of the Food and Agriculture Organization of the United Nations (FAO).
In his opening statement at the 38th session of the FAO Regional Conference for the Near East on 20 April, Qu Dongyu underlined the need to recognise “the importance of maintaining trade flows and of ensuring access to adequate food for all, particularly in import-dependent countries,” the 22 April report said.
Qu said disruptions to food production, trade and distribution systems across the region were further compounded by global implications, “including rising energy prices and disruptions in fertiliser markets, which are increasing production costs and affecting agricultural productivity both within the region and beyond.”
The ongoing geopolitical tension due to the US-Israel conflict in Iran is also impacting the palm oil sector, primarily due to weakening demand from Iran, according to an industry figure quoted in a 22 April report by The Edge Malaysia.
During a media briefing on 21 April, Malaysia External Trade Development Corporation (Matrade) chairman Reezal Merican Naina Merican said exports of palm oil and palm-based products to Iran dropped by 86.1% year-on-year to MYR90M (US$22.75M) in the first quarter of 2026.
Palm oil and palm-based products accounted for 62.4% of Malaysia’s total exports to Iran during the period, he added.
In addition, Merican noted that petroleum products and agricultural exports had also been hit by the ongoing tensions, with disruptions to fertiliser supplies impacting the agricultural sector.
Meanwhile, soaring crude oil prices were driving renewed demand for biofuels as the need to tackle fuel shortages outweighed concerns that using crops for fuel would drive up food prices, Reuters wrote on 21 April.
The conflict had disrupted about 20% of global oil and gas supplies, which typically pass through the Strait of Hormuz in the Middle East Gulf, the report said.
Crude oil prices were up by more than 30% since late February, before the war started, while prices for corn – a key biofuel ingredient – had risen by 5%, the report said.
Since the start of the conflict, countries in Asia – a region heavily dependent on Middle East oil imports which buys about 80% of the oil shipped through the strait – had set out plans to increase biofuel use, Reuters wrote.
Indonesia – the world’s leading palm oil producer and exporter – has said it would raise the mandatory blending rate for palm oil-based biodiesel to 50% from 40%.
“In Asia, countries do look at biofuels that can be produced from locally-sourced feedstocks as they can reach two goals at once – limit energy imports and increase profitability for farmers,” Kpler biofuels analyst Beata Wojtkowska was quoted as saying.
As the conflict had increased energy, transport and fertiliser costs, triggering a rise in global food prices, there could be concerns that increased biofuels use could potentially drive food prices higher, Reuters wrote.
However, Phil Aikman, Southeast Asia campaign director for non-profit Mighty Earth, said significantly higher food prices would only come about if biofuel makers built new plants at scale, which would take years.
As well as the time and cost involved in building new plants, fuel blending limitations and feedstock supply constraints would prevent a large and rapid growth in demand for biofuels, Kpler’s Wojtkowska said.
Biofuels only accounted for a fraction of global energy needs – meeting 4% of transport fuel demand, Reuters wrote.
According to research by consultants BMI, a unit of Fitch, biofuels are expected to meet 5% of transport energy needs by 2035.
