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October, 2026…
Closure of Strait of Hormuz drives diammonium phosphate to 802.5 dollars per tonne, pushing maize up 13.3 percent and soybeans 22.6 percent amid broader 28.4 percent spike in key phosphate fertilizer…
ISTANBUL…
Geopolitical tensions in the Middle East and resulting supply chain disruptions in the Strait of Hormuz have triggered a severe supply crunch in the global fertilizer market, driving up maize and soybean prices.
Diammonium phosphate, a key fertilizer for staple agricultural crops, surged 28.4 percent in the first nine months of the year to 802.5 dollars per metric tonne.
The rise from 625 dollars per tonne at the end of 2025 pushed up costs for major agricultural commodities, with maize prices rising 13.3 percent and soybeans 22.6 percent.
The de facto closure of the Strait of Hormuz to maritime shipping constrained access to agricultural inputs, as around one-third of global fertilizer trade passes through the vital waterway under normal circumstances.
Conflicts in the Middle East threatening oil supplies and risks at critical chokepoints such as the Strait of Hormuz pushed up risk premiums in crude oil prices, driving up the cost of diesel fuel, one of the most basic inputs for agricultural production.
The fertilizer market has felt the strongest impact through rising natural gas and ammonia prices.
Farmers have been forced to use less fertilizer due to higher costs, in turn weighing on global yield expectations.
Kutay Güzgör, investment research director at Participation Bank Kuveyt Turk, told Anadolu that these supply shocks have extended well beyond urea-based nitrogen fertilizers.
“Diammonium phosphate fertilizer is affected by logistical bottlenecks and that a significant portion of the sulfur and ammonia supplies vital for its production pass through the Strait of Hormuz creates persistent rigidity in phosphate fertilizer prices,” he said.
Güzgör said the logistical bottleneck risks cementing a structural decline in agricultural yield expectations as farmers are forced to compromise on their targeted fertilizer applications in the 2026-2027 planting season.
Despite a brief recovery in shipments amid a temporary US-Iran agreement, the subsequent collapse of the ceasefire and resurgence of hostilities in mid-July kept export volumes well below pre-war levels.
He noted that alternative global suppliers helped reduce the immediate supply gap by rerouting supply chains across longer distances, which continues to increase baseline freight costs.
He warned that a renewed spike in regional energy prices could lead to another surge in natural gas and nitrogen-based fertilizer prices.
Güzgör said he expects the impact of high fertilizer and energy costs on planting areas and productivity to be decisive next year.
“While fertilizer costs increase farmers’ production costs and squeeze profit margins, the prolonged persistence of high costs could lead to reduced fertilizer use, shifts in allocation or a shift towards crops needing less fertilizer – a decrease in the use of nitrogen, phosphorus and potassium may limit producer costs in the short term but ultimately pressure yields in the coming period,” he added…
