Nikkei reports fertilizer prices are up sharply as the Iran war disrupts key supply routes

Nikkei reports fertilizer prices are up sharply as the Iran war disrupts key supply routes

Fertilizer prices have surged sharply amid escalating conflict in the Persian Gulf, with experts warning of prolonged supply disruptions and heightened global food security risks. The U.S.-Israel-Iran war has severely constrained shipping through the Strait of Hormuz, a critical transit route for 20–30% of global fertilizer exports, including urea, ammonia, and phosphates according to research. Maritime insurance costs have skyrocketed, leading to a 70% decline in shipping activity through the strait since the conflict began. As a result, urea prices in the Middle East rose over $90 per metric ton (19%) in a week, while U.S. Gulf DAP prices climbed $30 per metric ton (5%) according to data.

The disruption has compounded existing market fragility. Natural gas—a key input for nitrogen-based fertilizers—has become scarcer as Iranian drone strikes hit LNG facilities in Qatar, a major exporter as reported. This has pushed urea and ammonia prices higher, squeezing farmers already grappling with low crop prices. Analysts note the timing is particularly dire, as Northern Hemisphere planting seasons approach and Southern Hemisphere producers prepare for 2026 harvests according to analysis.

Australia, India, and Southeast Asia face acute risks, with Australia's reliance on imported fertilizers exacerbating vulnerabilities as Reuters reports. Experts warn that prolonged conflict could force farmers to shift to less input-intensive crops or reduce fertilizer use, potentially lowering yields according to experts. While alternative shipping routes and domestic production may mitigate some impacts, higher costs are likely to persist. The situation has drawn comparisons to the 2022 Ukraine war's market shocks, though with a broader geographic reach as noted. Policymakers now face urgent challenges in balancing food security with geopolitical instability.