Middle East Tensions Drive Fertilizer Prices to New Highs

Disruptions in shipping through the Strait of Hormuz and rising tensions in the Middle East have led to a significant shortage of fertilizers, driving up costs for farmers worldwide. About a third of the global fertilizer trade typically passes through this key waterway, making it a critical choke point. The most affected product is diammonium phosphate, which saw a 28.4% price increase in the first nine months of 2026, rising from $625 per ton at the end of 2025 to $802.5 per ton.

The fertilizer market is also facing higher prices for natural gas, ammonia, and sulfur, many of which are sourced from the Persian Gulf region. This has contributed to a 13.3% increase in corn prices and a 22.6% surge in soybean prices. Additionally, rising crude oil and diesel fuel costs are adding to the financial strain on farmers, as these expenses impact field work and logistics.

Farmers are already reducing fertilizer application rates in response to the rising costs. Analysts warn that if the situation persists into the 2026/27 season, it could negatively affect crop yields and force producers to shift towards crops that require less fertilizer. While alternative suppliers are helping to mitigate the shortage, longer shipping routes are increasing freight costs. Further escalation in the Middle East and additional energy price hikes could exacerbate the pressure on the nitrogen and phosphorus fertilizer market.