Mideast conflict is latest threat to global fertiliser supplies
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Recent tensions in the Middle East are the latest reminder of the risks to crucial fertiliser supplies from the embattled region.Almost half of the world's shipments of urea, a nitrogen-based fertiliser relied on by farmers to grow grains and other key crops, come from the Mideast, Rabobank senior analyst Samuel Taylor said in a report this week. The latest escalation of violence between Israel and Iran had raised fears over a possible closure of the Strait of Hormuz, a critical export channel.While such a move isn't likely at this point, 'we can't take for granted just how concentrated some of these production and supply chains are,' Taylor said in an interview. 'We seem to be getting these reminders on a yearly basis.'The last big geopolitical shock to the price and availability of crop nutrients — the start of the Ukraine-Russia war in 2022 — was followed by runaway food inflation and a severe strain on farmers. Fertiliser markets over the last five years have undergone extreme price swings due to supply-chain shocks from the global pandemic and a surge in European prices of natural gas, a main input for most nitrogen fertilisers.Major agriculture producers Brazil and India are especially dependent on global markets for fertiliser. Brazil, which produces two corn harvests a year, imports more than 90% of its needed urea. Mideast tensions have sent prices of urea up this week in the South American nation, according to Bloomberg Intelligence analysts.In the US, the current season's top fertiliser application times have passed, though growers in just a few months will be turning to fall fertiliser applications for the next season.'For US farmers, don't expect a reversion down in pricing,' Taylor said. 'You're going to face cost price inflation into next year.'
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