In the era of globally interconnected food systems, agricultural trade has become integral to the stability of prices and food availability in both importing and exporting countries. Sanctions, tariffs, and embargoes imposed for political leverage do not merely disrupt shipping routes or trade balances; they reshape prices, availability, and affordability of essential commodities. Unlike industrial goods, food is directly tied to consumption and livelihoods, making trade interruptions uniquely de-stabilising for importing countries and vulnerable populations.
The Russia-Ukraine conflict exposed this fragility. Disruptions to Black Sea shipping immediately constrained global supplies of wheat, maize, and sunflower oil, triggering price spikes — demonstrating that even partial blockages can reverberate far beyond the conflict zone. Similar patterns were observed during export bans imposed by major suppliers during the COVID-19 period and the 2007-08 food crisis, when trade policy actions amplified global price volatility rather than containing it. Empirical studies across sanctioned economies and conflict-affected regions consistently show that trade disruptions and macroeconomic shocks transmit rapidly into food price inflation, dietary compression, and rising nutrition insecurity. The Food and Agriculture Organization (FAO) and the World Bank have documented how sanctions, export restrictions, and logistics disruptions disproportionately affect staple food prices in import-dependent countries, with long-lasting effects on household food access even after political tensions ease. The experience of countries in the Middle East and North Africa during periods of high geopolitical stress similarly reveals how fragile trade linkages can become pressure points for food systems.
Iran offers a contemporary example of how geopolitics transmits into food security. For years, Iran has faced episodes of constrained access to finance, insurance and shipping, along with currency volatility and domestic inflation. Even when food is formally exempted from sanctions, payment channels, freight availability and risk perceptions can disrupt the flow of staples and inputs, raising transaction costs and widening domestic price swings.
Empirical research has documented this channel. Household-level evidence after the re-imposition of US sanctions in 2018 finds that rising food inflation translated into measurable food-security impacts in Iran. Recent price movements in Iran’s two major cereals rice and wheat indicate how differing degrees of import dependence shape exposure to geopolitical and trade-related shocks. Domestic rice prices in the Tehran market doubled (Fig. 1) between 2022 (USD 9.5 per kg) and 2024 (USD 17.82 per kg), punctuated by brief spikes, before escalating sharply in 2025 (USD 75.98 per kg). This pronounced surge reflects rice’s status as a major import-dependent commodity for Iran, making its domestic price highly sensitive to external trade disruptions and exchange-rate pressures.
In contrast, domestic wheat prices rose more gradually over the same period, from USD 3.52 per kg in 2022 to USD 5.58 per kg in 2025 (Fig.1), despite the broader inflationary environment. This relative stability can be attributed to Iran’s near self-sufficiency in wheat production, with approximately 75 per cent of domestic demand met through local output, supported by extensive government procurement and subsidy mechanisms. As a result, wheat prices have been less directly exposed to external trade shocks and geopolitical tensions. The rice-wheat contrast highlights a central food security lesson: import dependence magnifies vulnerability to geopolitical disruption, while domestic production capacity can partially buffer essential commodities from international volatility.
The consequences of such disruptions are not confined within national borders. Food markets are globally interconnected, and shocks in one country reshape trade flows elsewhere. Constraints on Iran’s food imports tighten regional supply-demand balances, redirect shipments, and influence prices across neighbouring markets. This interdependence creates a second-order vulnerability: trade disruptions aimed at one country transmit shocks to both exporting and importing partners, often in unintended ways.
India’s agri-food linkages with Iran illustrate this transmission channel clearly. India is a notable supplier of commodities such as rice, tea, and selected horticultural products to Iran. Nearly 85 per cent of India’s export basket to Iran comprises agricultural commodities, making this trade relationship especially sensitive to sanction-driven risk perceptions, currency volatility, and payment settlement uncertainties. Any disruption in market access or trade finance could therefore translate into an agricultural export shock for India, with rice being the most exported commodity followed by oilcakes, fruits and tea.
From the demand side, India accounts for approximately 10 per cent of Iran’s total agricultural imports; however, this aggregate figure masks much higher commodity-specific dependence. Iran meets nearly 30 per cent of its domestic rice consumption through imports, of which about 43 per cent is supplied by India. For tea, roughly 39 per cent of Iran’s demand is import-dependent, with close to 60 per cent sourced from Indian exporters. A contraction in bilateral trade would therefore not only exacerbate supply constraints in Iran but will also disrupt India’s agricultural export earnings.
At this point, the distinction between humanitarian intent and economic reality becomes critical. In principle, food and agricultural inputs are widely exempt from sanctions on humanitarian grounds, reflecting an international consensus that essential goods should not be weaponised. In practice, however, humanitarian exemptions coexist uneasily with powerful economic compulsions. Constraints on banking channels and settlement systems raise transaction costs and payment risks, while heightened compliance burdens, insurance premia, and reputational concerns lead private exporters, insurers, and financiers to scale back exposure even when trade is legally permitted. As a result, market behaviour often reproduces the effects of trade restrictions without any formal policy change.
Humanitarian assistance can provide emergency relief, but it cannot substitute for routine commercial food imports that underpin national food systems. For import-dependent economies such as Iran, this creates a two-track food system: limited relief-oriented inflows alongside contracting market-based imports. The result is rising domestic prices, dietary compression, and a cumulative erosion of food access, even when headline food availability appears adequate.
Moreover, humanitarian logic does not address long-term food system sustainability. Conflict-related fiscal stress, financial frictions, and trade volatility crowd out investments in climate-resilient agriculture, water management, and rural infrastructure. While humanitarian carve-outs may alleviate short-term hunger risks, they do little to prevent the longer-term degradation of domestic production capacity and institutional resilience that ultimately determines food security.
In this sense, food trade disruption operates less as a discrete policy event and more as a cumulative risk process, shaped by financial frictions, logistics constraints, and private-sector risk perceptions. Iran’s experience demonstrates how import dependence heightens vulnerability to price volatility, while domestic self-sufficiency, as seen in wheat, can partially protect food security. Sustainability, therefore, extends beyond environmental concerns to include economic and institutional resilience. Strengthening these elements is essential to ensure price stability, access, and affordability in an era of persistent geopolitical uncertainty.
Ultimately, food trade is not geopolitically neutral, but it is socially non-substitutable. Allowing food flows to become collateral damage in geopolitical rivalries imposes long-run costs on consumers before policymakers and on importing countries before exporters. The gap between humanitarian intent and economic reality thus represents a market-mediated transmission channel through which geopolitical tensions undermine food security.
Niharika Borbaruah is Senior Research Fellow, ICAR-National Institute of Agricultural Economics and Policy Research (NIAP), New Delhi
Luv Tyagi is Young Professional, ICAR- (NIAP)
Smita Sirohi is ICAR National Professor, MS Swaminathan Chair, and former JS (G20), DAF&W, New Delhi
Views expressed are the authors’ own and do not necessarily reflect those of the organization
Views expressed are the author’s own and don’t necessarily reflect those of Down To Earth