Overview
- The effective closure of the Strait of Hormuz has cut off about one‑third of seaborne fertilizer, pushing global nitrogen and phosphate prices roughly 20% to 40% higher and adding steep insurance and freight costs.
- Higher natural gas prices are crimping nitrogen fertilizer output, with urea and ammonia jumping in key hubs, including urea rising from $516 to $683 per ton at New Orleans and to about A$1,350 per ton in Australia.
- Farmers are already trimming applications or changing crops, with Australian growers shifting toward barley, U.S. producers reporting sharp price jumps for diesel and nitrogen, and Indian farmers facing black‑market markups for urea and higher DAP costs.
- Governments and the U.N. are moving to blunt the shock, with India monitoring supplies and drawing on buffers, the EU preparing policy talks as costs climb, Pakistan enforcing stock measures, and the U.N. appointing an envoy and exploring a Hormuz transit plan for food and fertilizer.
- Analysts warn prolonged disruption could cut yields and lift food inflation, with one strategist flagging a potential lost corn season in the northern hemisphere and China’s export curbs further tightening alternative supply routes.