Shipping disruptions and plant shutdowns hit fertilizer supply as analysts warn industry is ‘in paralysis’ and say ‘full implications are not yet known.’
The closure of the Strait of Hormuz has shocked global fertilizer markets just as farmers worldwide prepare to plant spring crops, raising concerns that the disruption could ripple through food supply chains.
Several major fertilizer-producing countries in the Gulf rely on the narrow shipping channel to move products to global markets.
Since the United States and Israel launched strikes on Iran on Feb. 28 and Iran began targeting commercial ships in response, shipping through the Strait of Hormuz—which runs along Iran’s coast—has slowed to a near standstill.
No Vessels Leaving With Fertilizer
According to a March 11 report from shipping analytics firm Kpler, the conflict has affected the fertilizer trade, with “port suspensions, production halts, and a fleet of laden vessels with cargoes from across the Middle East Gulf unable to transit the Strait of Hormuz.”
Kpler said it observed 23 vessels either loading or already laden with fertilizers in the Middle East Gulf, noting that only one ship, the Ksl Hengyang, successfully transited the strait on March 7.
“No other vessel laden with fertiliser has departed the region since,” the report said.
Food Prices
The disruption could have wide-ranging consequences for food production.
On March 9, a spokesperson for U.N. Secretary-General Stéphane Dujarric said the disruption “will impact the world’s access to fertilizer, … which will increase the cost of fertilizer, which will increase the cost of food production.”
Global food prices were already starting to rise before the latest disruption.
According to the U.N. Food and Agriculture Organization, the benchmark measure of world food commodity prices increased in February, ending a five-month decline.
On March 5, Cédric Benoist, who farms wheat, barley, and other crops south of Paris, said that global fertilizer prices have jumped by dozens of euros per metric ton.
“It’s a mess because it’s spring,” he said.
Nearly 50 percent of global urea and sulfur exports originate from countries west of the strait and transit the waterway, and Saudi Arabia, one of the world’s largest phosphate exporters and a major supplier to the United States, also relies heavily on the route, according to the Fertilizer Institute.
About 20 percent of global liquefied natural gas, a key feedstock used to produce nitrogen fertilizers, also passes through the strait.
By Owen Evans
