Middle East Fertiliser Exports Down by About 70% as Iran War Chokes Hormuz Supplies
Fertiliser shipments from the Gulf have fallen by roughly 70 to 75 per cent as the Strait of Hormuz remains largely closed, raising the risk of weaker harvests and higher food prices worldwide.
Fertiliser exports from the Middle East have fallen by roughly 70 to 75 per cent as the region's war with Iran continues to disrupt shipping through the Strait of Hormuz, according to new trade data, in a squeeze that analysts warn could reach farms and food prices far beyond the Gulf.
The figures, compiled by commodity data firm Kpler and reported by The National, show shipments dropped to 994,000 tonnes in September, against 3.41 million tonnes in the same month last year. The fall covers sulphur, nitrogen in the form of urea, and phosphate fertilisers — the three nutrient groups on which much of the world's crop production depends.
The Strait of Hormuz, the narrow waterway between Iran and Oman, is the route through which almost all Gulf fertiliser exports normally travel. Since the United States and Israel launched attacks on Iran in February, commercial passage through the strait has largely stopped, with vessels facing attacks and insurers reluctant to cover transits.
Madeleine Overgaard, senior manager of agriculture data at Kpler, said export volumes were expected to stay near their current subdued levels through the end of the year unless the regional security situation improves. Saudi Arabia has been moving some fertiliser overland to its Red Sea ports, but the volumes involved are too small to replace seaborne shipments, she added.
The Gulf's weight in the global fertiliser market makes the disruption unusually consequential. The region accounts for 25 to 30 per cent of global sulphur production and up to half of seaborne sulphur trade, according to Kpler, while Gulf producers also drive much of the merchant market for urea. India, one of the world's largest producers of rice and wheat, is among the countries most exposed to any shortfall.
The pattern is confirmed by separate tracking data. Fertiliser shipments through the strait fell to near zero in September and stayed there through October, according to tracking data compiled by World Visualized and highlighted by Swiss bank Syz Group, while S&P Global has estimated that about 29 per cent of global urea trade, nearly half of seaborne sulphur and around 21 per cent of ammonia trade normally move through the waterway.
The effects are already visible in prices. Sulphur has more than doubled to above $1,000 a tonne, and phosphate fertiliser prices have risen by 25 to 30 per cent, according to the Syz summary, which also notes that phosphate producer Mosaic has idled operations including its South Fort Meade site in Florida. Urea, by contrast, has eased after an early spike, helped by higher exports from China and the United States.
The United Nations Food and Agriculture Organisation's food price index averaged 136 points in September, up 1.5 per cent from August, driven in part by uncertainty over shipping through the strait, which has kept fuel, fertiliser and freight costs elevated. Analysts say the fertiliser squeeze is only one part of a broader supply shock: the same closure has disrupted crude oil and liquefied natural gas exports from the region.
The risk to harvests is the deeper concern. Fertilisers boost crop yields, and a sustained shortage would be expected to cut output, particularly in countries that rely heavily on imported nutrients. The International Fertilizer Association has previously estimated that producers in Iran, Qatar, Saudi Arabia, the UAE and Bahrain account for about a third of global urea trade and almost half of sulphur trade.
What happens next depends largely on whether shipping through the strait can resume. A designated safe shipping corridor agreed by Iran and Oman in August has not brought a meaningful recovery in commercial traffic, with shipping companies citing insufficient insurance cover and uncertain security guarantees. A United Nations proposal for a fertiliser corridor remains stalled pending a wider United States-Iran agreement.
For now, the market is adjusting around the edges: China has become the swing supplier of fertilisers, Russia has absorbed some displaced demand, and Oman and the United States have emerged as alternative sources. But analysts caution that no single supplier can replace the Gulf's sulphur exports, and the longer the strait stays closed, the harder the squeeze on phosphate production — and on the harvests that depend on it — is likely to become.
