Prolonged upward adjustments in oil prices, driven by intensifying tensions in the Middle East, could increase the cost of critical agricultural inputs and influence food prices, according to the Department of Agriculture (DA).

In a statement on Tuesday, March 3, the DA said it is “closely monitoring” developments in the region amid attacks by the United States (US) and Israel against Iran, including Iran’s retaliatory strikes on other countries.

Agriculture Secretary Francisco Tiu Laurel said the DA is especially concerned about disruptions in the Strait of Hormuz, a crucial maritime route through which around 20 percent of the global oil supply passes.

He noted that any obstruction in the waterway has historically triggered spikes in global crude prices, further amplifying volatility across commodity supply chains.

“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,” he added.

In particular, Tiu Laurel said the government is concerned about the impact of the conflict on petroleum-based fertilizers and freight costs.

For a country that is highly dependent on imported farm inputs, such as nitrogen-based fertilizers derived from natural gas, he said a clear transmission channel is essential to sustain local production of key goods.

The National Confederation of Irrigators Association Inc. (NCIA) earlier wrote to President Ferdinand “Bongbong” Marcos Jr., warning that disruptions in shipments of raw materials would trigger a surge in fertilizer prices.

While the government has traditionally responded to higher fertilizer costs with subsidies for farmers, NCIA urged Marcos to mandate the use of locally developed biofertilizers.

For instance, the group said the country could shift to using Bio N, which can replace 30 to 50 percent of chemical nitrogen requirements for rice and corn.

NCIA added that the fertilizer is already being produced locally and is ready to meet nationwide demand if supported by clear government policy.

Regarding freight costs, Tiu Laurel said higher bunker fuel prices are expected to raise shipping rates, which would increase the landed cost of imported commodities such as wheat and animal feed.

“This, in turn, feeds into retail prices of bread, poultry, and pork, complicating efforts to contain food inflation,” he stressed.

Over the past year, the DA helped ease inflationary pressures through efforts to stabilize retail food prices, including rice, which was sold at ₱20 per kilo for certain sectors.