Overview
- Global fertilizer prices have risen roughly 44% since the Iran conflict escalated in mid-May, pushing urea to about $900 per metric ton and lifting broader fertilizer costs to their highest levels since 2022.
- Market analysts say the surge is driven by disrupted shipments through the Strait of Hormuz, which carries large shares of ammonia, urea and phosphate trade and has effectively limited exports.
- Fertilizer production costs are rising fast because nitrogen fertilizer uses natural gas and oil as both feedstock and fuel, so higher energy prices make manufacturing and transport more expensive.
- Farmers face squeezed margins and are likely to cut fertilizer use or switch crops this season, a choice that could reduce yields months from now and push food prices higher.
- Institutions warn the shock could worsen: the World Bank has said prices might climb another ~31% in 2026 if disruptions persist, and U.S. agriculture is exposed because the country imports about 35% of its fertilizer.