Fertilizer prices surge amid Iran conflict, raising fears of global food shortages

Analysts warn that if the disruption continues—especially due to restrictions in the strategically vital Strait of Hormuz—consumers could soon feel the impact through rising food prices.

Critical Shipping Route Under Pressure

The Middle East is one of the world’s largest fertilizer-producing regions, and the Strait of Hormuz serves as a key export corridor for global supplies.

According to data from CRU Group:

Around 35% of global urea exports pass through the Strait of Hormuz.

The route also handles about 45% of global sulfur exports, an essential component in producing phosphate fertilizers.

Significant volumes of ammonia, another key fertilizer ingredient, are also transported through the strait.

Urea is the most widely used nitrogen fertilizer worldwide and supports roughly half of global food production.

Warnings from Industry Leaders

Svein Tore Holsether, head of fertilizer giant Yara International, warned that the fertilizer sector could face severe consequences if supply disruptions persist.

“We should not underestimate what this could mean for global food production,” he said, noting that attention has largely focused on oil and gas markets while overlooking fertilizer supply.

“If fertilizers do not reach farmers’ fields, crop yields could fall by up to 50% in the first harvest,” he added.

Food Prices Could Rise Within Weeks

Experts say the impact on food markets could appear quickly.

Raj Patel from the Lyndon B. Johnson School of Public Affairs estimates that:

• Bread prices could rise within 6–10 weeks
• Egg prices could increase within a few months
• Pork and poultry prices could climb within about six months
• Fertilizer Prices Already Jumping

Prices have already surged significantly in recent days.

According to market data from Argus Media:

Granular urea prices in the Middle East rose by about $130 per ton, reaching $575–650 per ton.

Egyptian export prices increased by roughly $125, reaching $610–625 per ton.

European ammonia futures contracts for April shipments climbed to $725 per ton, about $130 higher than mid-February levels.

Production Disruptions in the Region

The turmoil is already affecting fertilizer production across the region.

QatarEnergy temporarily halted production of sulfur, ammonia and urea at its Ras Laffan industrial complex after a drone attack on the facility.

Meanwhile, Iran has reportedly suspended all ammonia production, while other regional producers are considering reducing output because ships are unable to safely pass through the Strait of Hormuz.

Rising Energy Costs Add Pressure

Another factor pushing fertilizer prices higher is the rising cost of natural gas, the primary input for nitrogen-based fertilizers such as ammonia and urea.

Holsether noted that natural gas prices used by Yara in Europe doubled from $10.6 per mmbtu to more than $20 within a few days.

A Sensitive Moment for Farmers

The supply disruption comes at a critical time for farmers in Europe and across the Northern Hemisphere, as many enter the spring fertilization season, when fertilizers are purchased and applied to determine crop yields.

Analysts warn that if supply disruptions continue, the resulting fertilizer shortage could trigger a broader global food shock, potentially even more severe than the surge in food prices following the Russian invasion of Ukraine