Iran war threatens fertilizer supplies critical to food production

The ongoing conflict in Iran poses a serious risk to food production worldwide. This is because the Middle East hosts some of the largest fertilizer factories and is a key source of the raw materials needed to produce fertilizer. Morningstar reports that about 25-35% of the global trade in these raw materials travels through the Strait of Hormuz, a narrow waterway bordered by Iran, which is currently inaccessible to ships. Iran ranks as the fourth-largest exporter of urea, a commonly used fertilizer, following Russia, Egypt, and Saudi Arabia, with Saudi exports also impacted by the closure of the strait. CRU Group, a data provider, notes that prices for Egyptian urea, a standard in the industry, have surged by over a third since the conflict began. Additionally, sulfur prices, which are essential for fertilizer, have risen significantly. Almost half of the world's sulfur exports come from Middle Eastern countries, according to CRU Group. Attacks on energy infrastructure in the area have already led Qatar’s main producer to reduce natural gas output, which is vital for making fertilizer and its components, potentially causing further supply issues. “The Strait of Hormuz is vital for global food production,” said Svein Tore Holsether, CEO of Yara International, a Norwegian chemical company, in an interview with CNN last week. “Fertilizers are not just another commodity—nearly half of global food production relies on them.”