Fertilizer Supply Disruptions Threaten Global Food Prices Amid Middle East Conflict

Disruptions to fertilizer shipments caused by the war involving Iran are raising concerns about a potential surge in global food prices, as trade through the Strait of Hormuz, one of the world’s most critical commercial shipping routes, faces continued instability.

The situation comes at a particularly sensitive time, coinciding with the start of the spring planting season in the Northern Hemisphere, when farmers typically secure key agricultural inputs needed to determine crop yields for the year ahead, according to a report by CNBC.

Stephanie Roth, chief economist at Wolfe Research, warned that fertilizer shortages could increase household food inflation by roughly two percentage points, adding about 0.15 percentage points to overall U.S. inflation on top of the estimated 0.40 percentage-point rise already linked to higher energy costs.

She noted that the risks extend beyond energy markets, potentially affecting global food security if supply disruptions persist.

Prices for imported urea in the United States have jumped by approximately 30% within a single week since the start of the conflict, according to data from the Fertilizer Institute.

Urea, a nitrogen-based fertilizer essential for boosting crop productivity, is among the most heavily traded fertilizers transported through Gulf shipping routes.

Veronica Nigh, chief economist at the institute described the situation as “a global fertilizer cost crisis,” warning that higher production expenses are likely to be passed on to consumers worldwide.

Analysts emphasize that timing is critical, as fertilizers are applied early in the agricultural cycle and play a decisive role in determining harvest volumes.

Reduced availability could force farmers to cut application rates, potentially lowering yields of staple crops such as corn, wheat, rice, and soybeans.

The United States relies on global markets for roughly 20% of its fertilizer needs, while countries across Asia and Africa depend even more heavily on exports from Gulf producers.

Prolonged shipping disruptions could therefore reduce agricultural output and increase household food costs globally, even as fertilizer producers benefit from rising prices.

Shares of fertilizer manufacturer CF Industries reached an all-time high on Monday, gaining about 10% over the past week, the company’s strongest multi-day performance since 2022, reflecting investor expectations of sustained demand and tighter supply conditions.

As geopolitical tensions continue to disrupt trade flows, economists warn that the conflict’s economic consequences may increasingly shift from energy markets to supermarket shelves worldwide.