Hungarian expert: Azerbaijan can become key link in preventing global food crisis
Baku, May 15, AZERTAC
“If the Strait of Hormuz were to be blocked, it would be more than just a regional event, it would be a worldwide inflationary event. The strait will continue to be one of the world's key energy and trade chokepoints, handling a major proportion of the world's oil, LNG, fertilizer transportation, and a disruption in those flows would soon lead to a rise in freight rates, insurance premiums, fuel costs, and, inevitably food prices. In this vein, Azerbaijan can become a key link in preventing a global food crisis,” Dávid Biró, Senior Advisor and Coordinator of Hungary’s Ludovika Center for Turkic Studies, told AZERTAC.
“In Europe, the message is clear: Diversification of routes is no longer a strategic nicety, it's our resilience necessity. The Middle Corridor in that context is important because it provides optionality, a feature much appreciated by global supply chains. It cannot be a substitute for sea lanes which take place in the Gulf nor can it take the whole of the east west trade if Hormuz is closed. It can help ease reliance on politically exposed corridors, however, and offer a degree of resilience if the big corridors become stressed,” the expert noted.
According to him, the appeal of the corridor to Europe is not just in terms of speed or cost, it's about ensuring goods can continue to flow when the dominant system becomes unstable. “If looked at from the perspective of food security, the significance of the corridor becomes even more apparent. The price of products for food markets are sensitive to transport costs, energy prices, the availability of fertilisers and shipping risks,” Biro said.
“The Hormuz crisis would cause the prices of the inputs on the agri-food chain to rise, including imported staples, animal feeds and processed foods,” he emphasized.
The expert pointed out that Europe already has enough reasons for heightened insecurity: “The war in Ukraine and the constant logistical disruptions have already taken their toll. The Middle Corridor can help to reduce the time needed to pass through maritime choke points, and provide a buffer to what has become an overly fragile supply chain.”
He mentioned that Azerbaijan is located at the main hinge of the corridor in the South Caucasus, linking the Caspian part with Georgia and Türkiye, and ensuring operational continuity in the corridor. “The Middle Corridor is poised to be a viable logistics platform if its ports, rail connections, and customs clearance work smoothly,” the expert said.
“There have been recent reports of Azerbaijan's transit role growing and the infrastructure began slowly to boost the capacity and credibility of the corridor. Azerbaijan can become a key link in preventing a global food crisis. Not alone, not in replacement of Black Sea, Suez or the Hormuz. But it may be one of those elements of a building's resilience that can help prevent the crisis from getting worse. In times of disruption, the Middle Corridor is also valuable as an alternative to traditional routes for those who import, trade, and govern. During major emergencies, a partial shift in trade flows can help to defuse panic, minimize price surges, and provide time to organize markets. Resilience is not ‘shock absorbing,’ it’s ‘shock restricting,” Biro concluded.
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