A Narrow Strait, Global Consequences: Hormuz Strait and Fertilizer Markets

Why It Matters

The Strait-induced squeeze risks raising fertilizer prices and reducing availability at a critical moment for crop planting, threatening farm economics and food-security outcomes globally if disruptions persist. Policymakers and buyers face urgent choices on procurement, subsidies and stockpile strategies to limit knock-on impacts on yields and food prices.

Summary

Speakers warned that disruptions in the Strait of Hormuz have sharply tightened already-fragile fertilizer markets by severing critical shipping routes and raising insurance and energy costs. The Middle East normally channels large shares of global fertilizer inputs—about 35% of seaborne flows, roughly 25% of ammonia, ~20% of phosphate and ~45% of sulfur—so even partial or prolonged disruption has driven recent price spikes (phosphates up ~22%, nitrogen ~53%) and pushed sulfur to record levels. Producers from Morocco to China are signaling output cutbacks as feedstock and logistics costs rise, and roughly 2.5–2.6 million tonnes of urea exports have already been sidelined since March. The panel stressed these shocks transmit through higher production costs, tighter availability, and volatile trade flows, creating regional shortages and complicating spring application decisions.