Analysis by Keith Rankin, 17 April 2026
My first paragraphs here feature Steve Keen, Australian economist, who was a panellist on Al Jazeera’s Inside Story 12 April 2026 (Could the Iran war pose lasting risks to global food security?, or here on YouTube):
Interviewer: “You’ve warned that the world could face famine within months … an extraordinarily stark prediction.”
Keen: “Thirty percent of the world’s fertiliser passes through the Strait, which has now been disrupted for over a month. There’s no sign of this war stopping any time. … There’s not going to be enough fertiliser available. Without fertiliser the carrying capacity of the world is about two billion people. Six billion of us are alive because fertiliser flows freely. … This could have catastrophic effects in all sorts of countries which could not ever imagine that they might face a famine. … That could apply to places like England. … The usual bias we have is that it’s always going to be a problem for brown people; let’s be frank, we’ve got masses of racism in the way we think about the world, and the West doesn’t worry when brown people die; well, what will happen when white people start dying; people might pay more attention.”
While Keen overstates the case, given that seventy percent of the world’s fertiliser flows through other pathways or is used near to where it is produced (though high transport costs, more generally, impede fertiliser flows; not just the blockade of the Hormuz Strait). Thirty percent of six billion is potentially 1,800,000,000 people at risk. And of course there is much food wastage at present. And many people, indeed most people in ‘England’, could survive eating less than half of what they do eat; they may even be less malnourished, by eating better food. Keen later acknowledged the issue of first world food wastage.
Nevertheless, when there are food shortages, ‘rational’ market behaviour – as understood by ‘game theory’ – means that much food would be bought up by speculators and hoarded; profiteering, in other words, a not uncommon feature of famines. (This is similar to the issue of ‘ticket scalping’.) Keen is correct to point out the problem of Euro-supremacism. One feature of the new world food order, noted by the Indian panellist on the program – Avinash Kishore – will be export bans. India, for example, is an important exporter of wheat and rice.
Keen: “Because it has such a market-oriented non-government approach to virtually everything, the United Kingdom has insufficient stocks of fertiliser, diesel fuel, and it imports about forty percent or more of its food. It’s very vulnerable to being told ‘we cannot supply you’. And it doesn’t really have any bargaining ploy in the opposite direction [unlike Australia].”
People assume that, whatever happens, Aotearoa could always feed itself; after all it’s a ‘specialist’ food producer, isn’t it? I’ll come back to that. But we note that the United Kingdom could survive foodwise with a reduction of 40% of its food supply, given that its domestic food production is in better domestic-international balance than is New Zealand’s. The fertiliser question becomes the bigger issue for the United Kingdom, and I’m guessing that it has nearly enough fertiliser stocks for 2026 spring planting, and could redirect some food exports to the domestic market. 2027 though? Incidentally, in the later 1980s, under pressure from Rogernomics, New Zealand got by for a few years with substantially reduced fertiliser usage.
Interviewer: “Just how vulnerable are modern food systems to international shocks like this?’
Keen: “The Trump administration [ie regime] had no idea what it was blundering into when it started this war. … We have a mindset of ‘perfect competition’ which implies numerous different sources, if one supplier gets knocked out then others can [immediately] take its place [as in the case of the New Zealand apple crop after Cyclone Gabrielle in 2023]; there’s no sense of urgency for the physical imports to production. … [Most] economists are completely naïve about the production systems. … There is such a thing as a critical input, and four of them pass through the Strait of Hormuz. … Yes, it’s too late to fix it, you cannot make up for missing ships.”
Keen: “I’m not overstating the potential. It might not happen, we might be lucky, shipments might arrive just in time. … The other possibility is still there. Now what happens if you don’t talk about it. … I would rather have people be too alarmed than too ignorant.”
Keen: “We think we eat green stuff. Ever since we invented fertiliser, we’ve been eating brown stuff. The green wrapping on the outside is basically us turning fossil fuels into food. … We think we have enormous resilience, but in fact we have enormous fragility. This was going to be exposed by global warming, but Donald Trump is like a Force Six cyclone coming in before the natural ones start turning up. … Our production systems are very dependent on specific inputs from specific locations. They cannot be easily replaced once damaged, and at the moment the supply is shut down completely.
Avinash Kishore, from the Indian ‘Food Policy Research Institute’: “The worst outcome would be if production itself suffers and then trade also suffers; [for example] with export bans. … China is the largest producer of fertilisers. If it restricts exports of both urea and phosphate … that makes the situation [much] worse. If trade keeps flowing, we’ll have less vulnerability, as we saw after the Ukraine crisis.”
Interviewer: “If the Strait of Hormuz were somehow to open tomorrow, and calm somehow holds, does this crisis end quickly, or has lasting damage already been done?”
Keen: “Lasting damage. One of the urea plants has already been damaged, and is not producing urea. We have to replace that facility, and these things take time. … This is showing the danger of the ‘just in time’ efficiency versus robustness [business model].’
I would note that ‘just-in-time’ can be robust, given the prevalence of the specific conditions which Keen mentioned; the conditions that most economists presume to be almost always true.
But geography can be capricious, and so can concentration of production reflecting the giant international economies of scale we see in production and transport; economies which minimise cost when disruptive forces are not at play. I would also note that many components of supply chains come as complements; thus, air freight remains largely a complement of passenger movements, fertiliser is a complement of fuel, and shipping works best when ships can carry a return load or an onward load.
New Zealand’s food security depends on its exports continuing to justify high two-way shipping capacity. What if, due to consumer prioritisation, demand in say China for New Zealand’s exports falls away; the reverse of the recent booms? This is the capriciousness of ‘income elasticity of demand’.
Some sobering statistics about New Zealand’s food and fertiliser imports
| New Zealand’s Food and Fertiliser Imports | |||||||
| $NZ million | World | % Australia | |||||
| three years ended: | 1990 | 2001 | 2025 | 2001 to 2025 | 1990 | 2001 | 2025 |
| multiple | |||||||
| wheat | 41 | 65 | 311 | 4.8 | 82.8% | 77.2% | 100.0% |
| rice | 10 | 27 | 105 | 3.8 | 69.0% | 71.9% | 25.6% |
| prepared cereal | 41 | 181 | 722 | 4.0 | 78.3% | 76.7% | 45.5% |
| incl. pasta | 8 | 33 | 153 | 4.6 | 64.6% | 58.5% | 17.4% |
| prepared vegetables | 59 | 143 | 529 | 3.7 | 54.9% | 49.4% | 16.8% |
| fodder | 25 | 113 | 1,531 | 13.6 | 78.9% | 46.6% | 20.3% |
| ALL FOOD | 778 | 1,937 | 8,637 | 4.5 | 41.2% | 46.3% | 29.2% |
| fertiliser | 55 | 260 | 839 | 3.2 | 1.7% | 3.0% | 3.6% |
| ALL IMPORTS | 12,759 | 27,966 | 77,306 | 2.8 | 20.9% | 23.0% | 10.9% |
These ‘harmonised trade’ data (from Statistics New Zealand’s soon-to-be discontinued Infoshare database) cover, for us, in particular the period from 2000 to 2025. Inflation for imported food has been low for that period, given that the exchange rate for the $NZ was at an all-time low in 2000, and that not-so-high New Zealand inflation has been consistently dominated by non-tradable items. We also note that New Zealand’s population has grown by 40% since 2000.
These data are ‘value-for-duty’, meaning for our purposes (and given that New Zealand is a free-trading nation) that they are exclusive of transport and insurance costs. Of course, we now know that transport and insurance costs are going to increase dramatically; especially for a geographically marooned population.
New Zealand’s spending on imported staples has increased from 3½-fold to five-fold since 2000. Annual increases in spending on food imports were even more dramatic in the 1990s, though tradable CPI-inflation will have been higher then. (New Zealand’s data on tradable inflation only commences in the late 1990s.)
New Zealand is dependent on Australian wheat. For other staple food items, the huge increases in food imports have come from other countries. Rice, the best staple food of all, soon will become much harder to get from the non-Australian sources we now prevail upon. Pasta, rice, and pre-prepared vegetables have become dinner-staples of student flats and other income-poor or time-poor households. Further, firms which process New Zealand grown vegetables – Watties and McCain – are planning to scale back their domestic operations. (See my Frozen Vegetables, Food Security, and the New Zealand Dollar, Scoop, 312 March 2026.)
Three other points are noteworthy.
First, spending on imported fodder – imported animal food – has increased dramatically, nearly fourteen-fold, since the three years centred on 2000.
Second, most imports of fertiliser, which have increased more than threefold since 2000, are not from our neighbour across the ditch. (They – the unassembled food matter which underpins the supermarket food we eat – are byproducts of the petroleum industry; hence they come to us from Singapore and South Korea.)
Third, total imported food is now 12% of all imports, up from 6% in 1990 and from 7% in 2001; and now less than 30% of it comes from Australia. ‘Total food’ includes a huge category of imported food simply labelled ‘miscellaneous’. (We also note that little more than ten percent of New Zealand’s total goods’ imports now come from Australia.)
New Zealand’s ‘Perfect Storm’ of food vulnerability
New Zealand’s worst – or at least most immediate – problem might not be fertiliser. Rather, it might be dependence on imports of both human food staples and animal feed. New Zealand’s food production system is now so specialised re the international marketplace, that the short-run and even medium-run supply costs of pivoting to a robust more domestically-oriented model are probably prohibitive.
New Zealand’s main source of staple food is still Australia, but to a much lesser extent than in the 1990s. (Before the 1980s, New Zealand produced most of its own starch-carbohydrates.) How well will we be able to persuade Australia to keep sending us food when there will be many more other mouths to feed in the Indo-Pacific region? And how much will Australia’s food production be curtailed by restricted fertiliser and other supplies?
In terms of the Indo-Pacific food and fuel supply chain, we already see most other (indeed much bigger) nations facing major impacts from the supply-chain crisis, and putting their domestic interests ahead of international considerations; they are effectively queue-jumping, undermining the rationing process by reducing fuel taxes and by increasing food subsidies and export barriers. (Note RNZ today about Asia.)
Not all governments are as complacent as New Zealand’s. The reduced fuel taxes do not only lead to queue-jumping; they also constitute a fiscal stimulus which may help in the process of a reorientation towards more secure staple food supplies. The New Zealand government is obsessively and irrationally opposed to any kind of fiscal stimulus.
Since 2000, New Zealand has enjoyed an export windfall and rising terms of trade, thanks to the high income elasticity of demand for dairy and other protein-rich foods. That’s due in particular to high per capita growth in East and South Asia. The problem for New Zealand is that when those economies stop growing – indeed when they recess – the fall in demand for luxury foods can be equally dramatic.
On RNZ’s Business News this morning, Corran Dann noted: “For a country like New Zealand, we’re a trading nation, we need to see growth in our trading partners because they buy our goods. That is how we make our way in the world. And likewise, for them.”
Reciprocal trade – ie multilateral exchange – is economics’ foremost example of a win-win ‘game’. But humans can be capricious, narcissist, supremacist. ‘Win-win’ competitive games can be disrupted by stupid players, or even by advocates of disruption as a greater good; giving way to rivalrous zero-sum, negative-sum, or ‘lose-lose’ games. (On ‘stupid players’, we may note, in passing, Carlo Cipolla’s 1976 essay – recently republished – The Basic Laws of Human Stupidity.)
New Zealand’s highly specialised export-oriented food production system can be expected to face sudden and simultaneous supply and demand shocks. Supply shock because New Zealand farming is now so dependent on imported fuel, fertiliser, and fodder. Demand shock because New Zealand specialises in the production of luxury foods, not staples, and faces a steep fall in the demand for luxury foods.
So, in terms of Steve Keen’s comments, New Zealand is arguably much more food-vulnerable than the United Kingdom, which Keen cites. And note Avinash Kishore’s comment about the food consequences of a general breakdown in international trade. (Unlike Keen, Kishore is an optimist!)
A crisis on top of a crisis
On present food insecurity in New Zealand, this from Google’s AI overview (search: ‘NZ food insecurity’): “Food insecurity is a widespread issue in New Zealand, affecting 1 in 3 households (33%) in 2025, with 18% facing severe insecurity.” See One in Three New Zealand Households Faced Food Insecurity in 2025, IPSOS, published by Scoop15 April 2026.
It can only be regarded as disgraceful that when, under the most favourable of circumstances in the food-supply system, a food-specialising country such as New Zealand has such record-high levels of food insecurity before the coming food crisis. This ‘insecurity despite abundance’ reality is not helped by Australia also having higher levels of food insecurity than most so-called developed nations. Continued access to Australian-produced staples is New Zealand’s main means to famine-avoidance.
Another part of the possible perfect storm is New Zealand’s lack of inclination and ability to queue-jump. When staples are scarce, ‘game theory’ comes into play. The staples of game theory are scarce-product-hoarding, joining queues to gain access to these staples, and a willingness to pay a bounty for such scarce essentials. New Zealand – marooned in the South Pacific – can expect to be at the end of the queues this country finds itself having to join.
(Other concepts of game theory include: ‘arms race’, ‘race to the bottom’, ‘prisoners dilemma’, ‘tragedy of the commons’, ‘survival of the fittest’, and Hobbes’ ‘war of all against all’. Game theory assumes that individuals and nations adopt ‘economic man’ postures of ‘rational self-interest’; meaning selfish strategies. Other thought perspectives suggest that such strategies are ‘stupid’ rather than ‘rational’, and that they miss out the widely-held concept of enlightened self-interest which incorporates visions of the public good and the public interest. Adherents of rationalism usually dismiss their academic adversaries as ‘altruist’; whereas they are really public-minded, not the same thing.)
Historical Points of Reference
New Zealand faced a similar trading and shipping crisis almost exactly 100 years ago. Though it was not a food crisis then; New Zealand was not then reliant on imported food staples, though it was reliant on other imports.
The issue was the 1926 British General Strike, which focussed minds in New Zealand then on how dependent New Zealand had become in its crucial trading relationship with the far-side if not the dark-side of the world. The New Zealand economy started to tank in late-1926. 1927 then became New Zealand’s own particular annus horribilus.
New Zealand already faced very high levels of private debt, falling export prices, and a tightwad government. With the shipping constraints tipping the country over the edge, farmers walked off their farms in greater numbers than during the later Great Depression, rural New Zealand depopulated, bank balances plummeted, and the country went into a sharp recession.
The Reform (think National) government had been elected in 1925 with 47% of the votes and 69% of the seats. In the 1928 election, that government was unceremoniously turfed out of power, falling to 34% of the vote and 34% of the seats. The faded Liberal Party – under the new name of United – formed a government with the support of the new Labour Party. The economy recovered. Though the new governing arrangements didn’t last; Reform came back into government as the junior coalition partner. Eventually – in 1936 – United and Reform joined forces to create the National Party.
Another historical story of relevance is about how Germany lost World War One, through hunger. That war, in full, lasted 4¼ years; an amount of time the present Russia-Ukraine War will soon surpass. Essentially, Germany – on the battlefield, and with its lethal submarines – won the first four years (including a comprehensive defeat of its main adversary, the Russian Empire) but lost the last three months.
The critical factors in the end were the British Royal Navy blockade on German shipping, a staunch French fightbackin July 1918, and an influenza pandemic arising from an existing battlefield flu strain combining with a new strain brought over by greenhorn the American latecomers. The shipping blockade induced severe famine in Germany. That famine was so severe that it was later used to justify carpet bombing (aka area bombing) in World War Two, on the basis that no amount of RAF bombing could be as bad for German civilians as that blockade-induced famine.
Finally
The supply chokepoints around the Arabian Peninsula – the southwest of Southwest Asia – might ease sooner rather than later. Though I, unlike New Zealand’s Prime Minister, wouldn’t bet on it. New Zealand has engaged in a slow game of Russian roulette; there is now an extra bullet in the revolver’s chambers, and the pace of the game has quickened.
Will New Zealand, having played its game of chance, become collateral damage? New Zealand almost certainly was not Binyamin Netanyahu’s target.
Steve Keen focussed on the fertiliser chokehold; the core of the world’s food supply which is in fact a byproduct of the petroleum industry (and of the discussion about refined oil supplies). New Zealand’s plight is actually significantly worse than that; it’s a potential and dramatic shortfall of imported human and animal feed – a shortfall that would precede a fertiliser shortage.
What happens if or when the food ships are redirected elsewhere? Those ships burn a lot of fuel coming to and going from New Zealand. Would the world prioritise five million whitish lives, marooned in the South Seas, over ten million brown lives more easily saved? Should it? I guess not. Will future historians refer to the Great Aotearoa Famine of 2027?
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Keith Rankin (keith at rankin dot nz), trained as an economic historian, is a retired lecturer in Economics and Statistics. He lives in Auckland, New Zealand.
