The conflict in Iran is disrupting fertiliser production and exports in the Middle East, tightening global supplies and raising fears of higher food prices, industry executives and analysts have warned.
The Middle East is one of the world’s largest fertiliser producers, while the Strait of Hormuz is a crucial shipping route for exports. About 35 per cent of global urea exports pass through the waterway, according to CRU data. Urea is the most widely used nitrogen fertiliser, which in turn underpins around half of global food production.
The route also handles 45 per cent of global sulphur exports, a key ingredient used to produce phosphate fertilisers, as well as significant volumes of ammonia, a key ingredient for nitrogen fertilisers.
“We shouldn’t underestimate what this potentially could mean for global food production,” said Svein Tore Holsether, chief executive of Europe’s largest fertiliser group Yara.
He added that the focus on oil and gas was “overshadowing” the impact on the fertiliser industry. “If you’re not getting [fertiliser] into the field of the farmers, yields could go down by up to 50 per cent in the first harvest,” he said.
If the disruption continues, consumers could see higher prices for bread within six to 10 weeks, eggs within a few months and pork and broiler chicken within six months, estimates Raj Patel, food system expert at the Lyndon B. Johnson School of Public Affairs.