Rising fertilizer prices and sowing challenges: How the Middle East situation impacts global agriculture

The Strait of Hormuz carries about one-fifth of global oil supplies and nearly one-third of global seaborne fertilizer trade, making it both an “energy artery” and a “food artery.” As the spring planting season begins in the Northern Hemisphere, shipments of oil and fertilizers from the Persian Gulf are being disrupted by shipping blockages linked to the conflict involving the United States, Israel, and Iran. This raises risks of fertilizer shortages, higher freight costs, and rising food prices.

Natural gas is a key feedstock for nitrogen fertilizer production. The Middle East is a major exporter of liquefied natural gas and a leading supplier of nitrogen fertilizers such as urea. Due to disruptions in the Strait of Hormuz, countries like Brazil and Sudan are facing difficulties in sourcing fertilizers, while producers such as India and Pakistan are struggling to secure raw materials.

Brazil, a major global agricultural producer and exporter, heavily depends on fertilizer imports from the Middle East, Russia, and North Africa. Bernardo Silva, executive director of Brazil’s fertilizer input association, said the current conflict has exposed the “vulnerability of Brazil’s fertilizer market.”

According to research firm Kepler, several vessels carrying nearly 1 million tonnes of fertilizers are currently stranded in the Persian Gulf. Even if shipments resume immediately, it would take weeks for cargoes to reach ports and then be transported inland. Since fertilizers must be applied before crop growth begins, delays threaten the timing of the spring planting season.

The seasonal and globally interconnected nature of the fertilizer market amplifies supply risks. Unlike oil, fertilizer purchases are tied to planting seasons, and most countries lack strategic reserves. At the same time, disruptions in one region can quickly affect prices worldwide.

Germany’s Frankfurter Allgemeine Zeitung recently reported a sharp rise in fertilizer prices following disruptions in Hormuz shipments. Urea prices surged by around 30% in a week, reaching their highest level since 2022.

“It is clear that no fertilizer shipments are currently leaving the Persian Gulf, creating a major gap in the market,” said Jinny Breach, a data analyst at the University of Colorado Boulder.

A global fertilizer supply shock could ultimately lead to food shortages and higher prices. Joseph Glauber, senior researcher at the International Food Policy Research Institute, noted that rising fertilizer costs will influence crop choices. Farmers may shift to less input-intensive crops or reduce fertilizer use, potentially lowering yields.

Soybeans require less fertilizer than corn, according to U.S. media reports. Amid rising prices and supply uncertainty, some American farmers are planning to expand soybean acreage.

Ongoing shipping disruptions have pushed global oil futures back above $100 per barrel at the start of the week. Energy prices are closely linked to food prices, affecting everything from fertilizer production to transportation.

Perishable goods such as fruits, vegetables, meat, and dairy are particularly sensitive, as they cannot be stored for long periods and their prices react quickly to energy market fluctuations.

Analysis by Al Jazeera highlights that refrigeration, packaging, and logistics depend heavily on fuel and petrochemicals, making energy costs a key driver of food prices.

Deborah Weinswig, CEO of research firm Courset, said consumers will feel the ripple effects through higher supermarket prices.

In low-income countries, where food accounts for a large share of household spending, the impact could be severe. A recent UNCTAD report warned that disruptions in the Strait of Hormuz could drive food prices higher, with particularly serious consequences for the most vulnerable economies.

Tags: fertilizers, fuel