Hormuz Blockade Sparks Fertilizer Price Surge

The global fertilizer supply crisis has deepened due to the blockade of the Strait of Hormuz, disrupting shipments and driving up prices. Diammonium phosphate, a critical input for corn and soybean cultivation, has seen its price surge by 28.4% in the first nine months of the year to $802.5 per metric ton.

The closure of the vital waterway, which accounts for approximately one-third of global fertilizer trade, has constrained access to sulfur and ammonia, essential components for fertilizer production.

Kutay Guzgor, investment research director at Kuveyt Turk, warns that supply shocks have extended beyond urea-based nitrogen fertilizers. 'Diammonium phosphate fertilizer is affected by logistical bottlenecks, and a significant portion of the sulfur and ammonia supplies pass through the Strait of Hormuz,' he said.

The subsequent collapse of the US-Iran ceasefire in mid-July has kept export volumes well below pre-war levels. Alternative suppliers have helped reduce immediate supply gaps by rerouting supply chains across longer distances, but this shift continues to increase baseline freight costs.