The Caribbean Islands, heavily reliant on imports, are facing a significant trade shock due to the ongoing war and the resulting shipping and energy crisis in the Strait of Hormuz, according to UN researchers. This trade shock is said to be one of the most severe since the COVID-19 pandemic and Russia's invasion of Ukraine in 2022.
The surge in crude oil prices to over $114 a barrel earlier this year, along with increased shipping costs, insurance fees, and delivery delays, is expected to have a severe impact on low-income households. The UN World Food Programme (WFP) warns that the Caribbean, being heavily dependent on imported food, is already feeling the effects of this crisis.
In addition, experts are cautioning that there is a 61% probability of the El Niño climate phenomenon occurring by mid-2026. Historically, El Niño has brought heatwaves, droughts, and crop failures to nations in the Caribbean that are already struggling.
Key points of the crisis include:
- Fuel shock leading to increased food prices: High oil and shipping costs are driving up the prices of imported food, electricity, and transport, putting pressure on household budgets across the Caribbean. - Heavy reliance on imports: The region's heavy dependence on food imports makes it particularly susceptible to global price spikes and disruptions in the supply chain. - Rising fears of drought: The UN's World Meteorological Organization (WMO) has indicated a 60% chance of an El Niño weather event this year, which could result in severe dry spells in countries like Belize, Guyana, Suriname, Jamaica, and Trinidad and Tobago, posing threats to crops and water supplies. - High levels of food insecurity: Prices have surged by 55% to 60% since 2018, leaving many families struggling, with food insecurity remaining significantly above pre-pandemic levels. - Continuous climate-related disasters: Recurring climate events such as Hurricane Beryl in 2024 and Hurricane Melissa last October have left households with limited resilience to cope with new shocks. Even minor price increases or crop losses could push many households into crisis.
Authorities in Belize are bracing for potential drought conditions, while farmers across the Caribbean are concerned about reduced harvests due to declining rainfall and rising temperatures. For low-income families, the impact could be devastating, as food and transportation expenses represent a substantial portion of their budget. This could lead to reduced meals, a shift to cheaper and less nutritious food options, or increased debt.
Small-scale farmers and fishers are also vulnerable, facing higher operational costs amid worsening weather patterns. Experts emphasize the urgency of taking swift action to stabilize markets, support incomes, and safeguard food production in the coming months to prevent a deeper crisis in the region.
Even if global conditions improve, the Caribbean may continue to struggle with escalating prices, climate-related shocks, and worsening food insecurity, creating a challenging cycle that needs to be addressed promptly.
