Welcome to the age of hoarding
As global economic uncertainty mounts, stockpiling is back
Gillian Tett
© Efi ChalikopoulouWhen the Iran war erupted on February 28, Pakistan’s government knew it faced a double economic squeeze.
Not only does it import its fuel through the Strait of Hormuz — which is now blockaded — but, crucially, it also relies on imported fertiliser inputs.
But then Pakistani finance minister Muhammad Aurangzeb saw two factors that (slightly) eased the shock: Pakistan has been developing solar power in recent years; and its companies started 2026 with fertiliser stocks “that were much larger than last year”, as he told last week’s spring meeting of the IMF.
“We were fortunate.”
In light of this, Aurangzeb is considering a new step: creating “strategic reserves” of items like fertiliser in addition to “commercial reserves”, he says.
In plain English: Pakistan may start hoarding.
Welcome to a new trend.
And it is no surprise.
After all, this week’s IMF meetings revealed a mood of corrosive uncertainty, due to the Iran war.
So much so, that the Fund took the extraordinary step of issuing not one but three economic forecasts.
These project global growth and inflation of either 3.1 per cent and 4.4 per cent this year, or 2.5 and 5.4 per cent, or 2 per cent and nearly 6 per cent — all depending on how long the blockade of Hormuz lasts.
But amid this fog of war, two points are clear: the world is sliding ever deeper into an era of geoeconomics, where economic policy is a tool of political contestation; and there is now an urgent need for nations and companies to become more resilient to shocks, as the economic interconnections that we previously relied on are weaponised.
Hence the new interest in stockpiling.
To be fair, this shift is not entirely new.
After the 1997 Asian financial crisis, many affected nations started to hoard more foreign exchange reserves — and continue to do so.
During the Covid-19 pandemic, consumers stockpiled everything from toilet paper to face masks.
Indeed, if you look at Ngram — which measures English linguistic references — chatter about hoarding has risen and fallen over time.
One peak was seen just before and during the second world war. However it has also risen in recent years.
Either way, some countries were increasing their current stockpiles well before the Iran war.
In recent years, China, for example, has been quietly building huge strategic stocks of essential materials, which include fertiliser.
Its oil reserves, reportedly up to 1.4bn barrels, have helped it weather the Iran shock.
Japan has also become an obsessive hoarder, ever since China reacted to a political fight in 2010 by halting rare earth exports to the country.
It now has created stockpiling targets for rare earths and has built an oil reserve, helped by tight collaboration between public entities and private companies, and its mighty trading companies (which are a key strategic advantage for Japan today, albeit oft overlooked).
However America is now trying to follow suit.
It has long run a strategic oil reserve (currently 60 per cent full, at 415mn barrels).
But it has now also launched a so-called Project Vault initiative to boost stocks of rare earths.
Some farmers want strategic fertiliser reserves too, since they are now being hit by massive price rises.
And Europe is also tiptoeing that way — albeit belatedly.
Indeed some German companies are even calling for the creation of their own Japanese-style trading houses, as the need for economic self-defence grows.
Is this cultural shift a good thing?
Not according to more ancient wisdom.
In Dante’s Inferno, for instance, hoarders were consigned to the fourth circle of hell.
And during the first and second world wars, western governments ran anti-hoarding campaigns, with slogans like “Americans!
Share the meat as a wartime necessity!” and “Patriotic Canadians Will Not Hoard Food!”
Similar sentiments were on display last week in Washington, where Kristalina Georgieva, IMF head, and Fatih Birol, head of the International Energy Agency, both begged nations to avoid hoarding fuel.
“Don’t impose export restrictions that are only making the disequilibrium worse,” Georgieva said.
Economists who believe in the magic of free markets, globalisation and economic efficiency might agree.
After all, hoarding tends to hurt the most vulnerable and undermine growth; money and goods that are locked up in vaults cannot be deployed in a productive manner.
But inefficient or not, don’t expect the stockpiling instinct to vanish soon.
Even if the Iran war ends tomorrow, it will be painfully hard to restore the trust which has been shattered — not just in American leadership, but in the idea that global markets and seaways will always stay open, as we assumed a decade ago.
And cultural scars tend to last: look at how the 1930s Depression changed economic behaviour for a generation.
Dante might spin in his grave.
But for the rest of us — everywhere from Pakistan to the UK — pre-emptive hoarding of items like fertiliser makes sense.
It is a sad signal of our times.
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