Key Takeaways:
A top fertilizer executive warned that nitrogen fertilizer prices have nearly doubled and could rise further if the blockade of the Strait of Hormuz persists, a situation that threatens to increase food prices globally.
"Price has gone up quite a bit, but it could go higher if this continues," Ahmed El-Hoshy, Chief Executive Officer at Fertiglobe Plc, a major nitrogen fertilizer exporter, said in an interview. He warned the dynamic presents a severe challenge for agriculture that could ultimately pass through to food prices.
The ongoing blockade has cut off about one-third of the global seaborne fertilizer trade, according to the company. The disruption has sent buyers scrambling for alternative sources, with many paying a premium for limited supplies. Current nitrogen fertilizer prices are already approaching double their pre-conflict levels.
The impact is hitting farmers who are already in a precarious financial position. A recent American Farm Bureau Federation survey revealed that 70 percent of U.S. farmers cannot afford their full fertilizer needs for the 2026 season. This supply shock follows years of rising costs since the pandemic and Russia's 2022 invasion of Ukraine, which had already pushed prices up by more than 25 percent year-over-year in 2021.
El-Hoshy noted that high prices are beginning to dampen demand, particularly in markets with less purchasing power, such as sub-Saharan Africa and Australia. The war in the Middle East has also driven up natural gas prices, a primary input for nitrogen fertilizer, increasing production costs and further squeezing margins for producers and farmers alike.
Concerns are already extending into future planting seasons. A survey by the National Corn Growers Association found that for every farmer expressing concern about fertilizer availability for the 2026 crop, nearly two were more concerned about the 2027 crop, signaling long-term anxiety across the agricultural sector.
This article is for informational purposes only and does not constitute investment advice.
