United States–Israeli strikes on Iran since end-February have led to intense fears all over the Middle East, with people in most parts of the region including United Arab Emirates business centre Dubai instructed by the government to stay indoors due to air strikes and missile interceptions.
Already the debris from these mid-air blasts have led to casualties: The UAE Ministry of Defence announced that missile debris resulting from the interception of two waves of Iranian missiles fell in a residential area, causing one death and significant damage.
This is not counting deaths in Iran which number over 550 as of time of publishing, and US military casualties which number six as of time of publishing.
Dubai International Airport, one of the world’s busiest airports, suspended all flight operations until further notice, and Monday March 2 saw the rise of oil prices and tumult in the stock markets leading to fears of significant disruption to global economies.
Amid all this, UAE officials have continued to maintain that local food supply remains sufficient and stable, urging residents to refrain from panic or excessive grocery purchases.
“In the midst of geopolitical unrest in the region, the Ministry of Economy and Tourism (MoET) confirms that essential food commodities in the country are available in sufficient quantities in the markets and across the UAE, and that supply chains are continuing uninterrupted,” MoET said via a formal statement.
“The country’s strategic reserves of essential goods are highly efficient, comprehensive, and diverse, ensuring the ability to meet the needs of local markets for extended and reassuring periods. [All] essential food and non-food items are available in abundant quantities across all markets and retail outlets nationwide.”
But despite these reassurances, significant doubt still remains over how long this stability can last not only in the UAE but across the region, especially given the Middle East imports a significant proportion of its food, between 80% to 90%.
Most countries in this part of the world have been steadily working to improve self-sufficiency and resilience, but the fact is that this strategy needs time to be realised and currently imports are crucial to its survival – which makes global supply chains a vital part of food security here.
But with the Iran conflict intensifying and both US President Donald Trump and Israeli Prime Minister Benjamin Netanyahu showing no signs of backing down until ‘change’ is seen in Iran, Iran is retaliating with strikes on other countries in the Middle East with US military presence including Kuwait, Saudi Arabia, the UAE, Oman, Qatar and Bahrain so both air and sea routes throughout the region are already being significantly disrupted.
Food commodities most likely to be affected: Rice
As it is, trade impacts are already being seen on one of the UAE’s biggest trade and economic partners, India – the All India Rice Exporters Association (AIREA) expressed concerns over potential disruptions of rice exports to Iran.
“Iran is one of India’s largest rice importers, with some 25% of India’s basmati rice exports going into this market. Last year basmati rice exports here were valued at some US$1.2bn,” AIREA General Secretary Ajay Bhalothia said.
“Another 20% of Indian basmati rice usually goes to Iraq, but this conflict means that these exports are also likely to be affected, and the uncertainty also means that rice exports throughout the region are likely to be impacted.”
Bhalothia also told local television channels that Indian basmati rice exports to Iran had ‘virtually halted’ since the start of the conflict, and there were doubts as to whether India’s latest shipment, which was in transit when the war started, would be received amid the chaos.
Another key concern here is the fact that the Strait of Hormuz – a narrow sea corridor by which many important commodities tend to transit, commonly acknowledged as one of the most important trade passageways in the world – is being affected, as Iran closed this shipping lane on Saturday, and all ships attempting to pass through this strait face immediate risk of attack from Iran as well.
The Indian Rice Exporters Federation (IREF) has also advised its members to be prepared for possible restrictions in this area, and be vigilant about finalising new deals that would require passage here.
IREF 2025 data shows India’s top five basmati rice destinations to be Saudi Arabia, Iran, Iraq, the UAE and Yemen – all of which are in the Middle East region and stand to be severely affected by the current Iranian conflict.
Food commodities most likely to be affected: Meat
The Middle East is one of the world’s largest consumers of lamb, driven by halal requirements and cultural preferences with many local recipes focused on the use of lamb meat.
But just like the sourcing of its many other food items, most of its lamb is imported and its top suppliers are Australia and New Zealand – According to the Australian Department of Agriculture, the Middle East has emerged as Australia’s largest regional export destination for sheep meat by volume over the last decade.
But the escalating conflict has forced many exporters to put a hold on plans for this region, with many also having to hold their breath as they await news of current shipments already on the way to the Middle East.
Australia’s Tasmanian Quality Meats (TQM) was one of the firms that had to recall hundreds of thousands of dollars of lamb back to Australia to avoid greater loss.
“The risk of trading in this region is high now and costs are rising as well, [so it made more sense to] get the meat back [to Australia] instead of it going bad and being discarded,” TQM MD Jake Oliver said in a formal statement.
Separately, the New Zealand Meat Industry Association also stated that almost all New Zealand meat exports to the Middle East region go through the Strait of Hormuz, and millions of dollars of product are currently at risk.
“If Hormuz is closed, congestion and delays will primarily impact chilled exports to the Middle East,” the association stated.
Food commodities most likely to be affected: Tea and dairy
Many markets in the Middle East have a strong tea culture, and the UAE, Iraq, Iran as well as Saudi Arabi are among the largest importers of teas in the region.
Key tea trade partners include India, Sri Lanka, China and Kenya, so exporters in these markets are also showing the most concern over the current conflict.
“Iran is the biggest buyer of India’s Assam orthodox black tea, with about 50% of India’s production consumed by this market alone,” Asian Tea Company Director Mohit Agarwal said in a statement to local state media.
“We were hoping to export higher volumes of Assam teas to the Middle East, in particular Iraq and Iran, given recent Assam government subsidy hikes, so we hope and pray for a quick resolution.”
Bigger fears loom for the tea industry if the conflict is not ended swiftly in the form of excess tea supply, as this would rapidly cause tea prices to drop as well as profits to reduce significantly if no alternative purchasers are found for the excess supply.
Dairy faces a similar situation as the region also imports the majority of its dairy – New Zealand in particular faces the biggest risk of being affected, with the New Zealand Ministry of Foreign Affairs estimating exports to stand at NZ$1.8bn (US1.07bn) annually.
Fonterra is a significant exporter to the Middle East, and has issued a statement saying that it is as yet too early to known the impacts of the conflict for the company.
“We are well-versed at trading through geopolitical and trade volatility with supply chain disruptions,” it said.
“The situation remains highly unpredictable with a variety of scenarios that could play out over time.”
So what is next?
In addition to all of this is the very real possibility that oil supplies will be hit, as some 20 million barrels of crude oil rely on the Strait of Hormuz for transit as well, and impacts on oil supply can very rapidly affect prices not only in the oil sector but all sectors that rely on oil and logistics – including food and beverage.
The hope is that this will be a limited conflict that will resolve quickly, and AMP Bank Chief Economist Dr Shane Oliver has placed a 60% probability on this being the case.
“[This would mean that] the war is limited with Trump likely finding a way to declare victory in the next week or so, presumably on the basis that he has (again) obliterated the threat from Iran and that he will leave it to the Iranian people to sort out,” he said.
“[That said, there is also a] 40% probability that this will not happen and global oil supplies are significantly disrupted – Trump may lose the gamble with Iran fighting on for longer forcing the US to say involved longer. Iran could descend into chaos as occurred in Iraq and Afghanistan necessitating US troops on the ground.”
It is still too soon to know which scenario will play out and things are very unpredictable as Fonterra has said, but higher oil and petrol prices would inevitably affect the food and beverage sector negatively, so a quick resolution would undoubtedly be the best outcome for all – but given Dr Oliver’s close estimates, only time will tell how this plays out.
