Middle East crisis: Iran accuses US of violating international law over seizure of vessel in Gulf of Oman

Agricultural markets have yet to price in the risk of a prolonged supply-chain disruption, raising the prospect of a sharper impact on food production next year, according to traders.

Vijay Chakravarthy, chief risk officer at Louis Dreyfus Company, one of the world’s largest agricultural commodities traders, told the FT Commodities Summit that the market was still assuming the disruption would be short-lived.

The warning comes as supply chains for key agricultural inputs such as fertilisers — heavily reliant on flows from the Gulf — face disruption as a result of the conflict, with knock-on effects expected to feed through into food production.

Also at the event, the head of a leading energy commodities trader said European gas prices have remained surprisingly subdued despite the conflict.

Bill Reed, chief executive of Castleton Commodities International, said that he would have expected prices to be “30 to 50 per cent” higher.

“You have to believe that this is going to be resolved soon or you have to believe that, prior to this, [gas] was overpriced,” he said.