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Closure triggers rapid price fluctuations in global agriculture markets by halting energy and essential crop nutrient exports…
ANKARA…
The closure of the Strait of Hormuz is triggering sharp fluctuations in global agriculture markets by blocking both energy exports and the supply of key crop nutrients used in fertilizer production.
The disruption is putting heavy pressure on the global fertilizer industry, particularly for products such as urea and phosphates that depend on supplies from the Gulf region, with prices already rising due to blocked exports.
According to the International Fertilizer Association (IFA), five major Gulf producers — Iran, Qatar, Saudi Arabia, United Arab Emirates and Bahrain — accounted for 34% of global urea trade and 23% of global ammonia trade in 2024.
Nearly half of global urea trade originated from the Middle East, with about 18.5 million tonnes exported through the Strait of Hormuz that year.
The wider Middle East region supplies a significant share of global fertilizer inputs.
Urea production relies heavily on natural gas, which represents between 80% and 90% of the cost of producing ammonia, the main building block of nitrogen fertilizers.
The strait therefore plays a critical role in the economics of nitrogen fertilizer production because of its importance in global natural gas flows.
At the same time, the waterway carries nearly half of global seaborne sulfur shipments, a key raw material used to process phosphate rock into finished phosphate fertilizers.
Any disruption to oil and gas trade through the route has ripple effects across fertilizer supply chains because of the region’s large share in global energy exports.
Egypt, a major urea producer supplying the European Union, could face particular risks. Its fertilizer plants depend on imported natural gas, with Israel among its main suppliers.
If the conflict widens or alternative routes fail to compensate for the disruption, Egypt’s production could decline further tightening global fertilizer supplies.
Iran effectively closed the Strait of Hormuz around March 1, 2026. The strategic waterway linking the Persian Gulf with the Arabian Sea normally handles about 20 million barrels of oil shipments daily and around 20% of global liquefied natural gas (LNG) trade, most of which is destined for Asian markets.
The disruption is forcing exporters to search for alternative shipping routes while also cutting off the region’s large exports of crop nutrients used in fertilizer production.
The supply shock, combined with rising energy and freight costs, is expected to increase pressure on global food supply chains and contribute to higher food prices worldwide…
www.aa.com.tr
