Middle East Tensions Spark Global Fertilizer Price Spike

Global fertilizer market disruptions have led to a surge in corn and soybean prices. The Middle East tensions, particularly in the Strait of Hormuz, have constrained access to agricultural inputs, with around one-third of global fertilizer trade passing through this vital waterway under normal circumstances.

The price of diammonium phosphate, a key fertilizer for staple crops, has surged 28.4% in the first nine months of the year to $802.5 per metric ton, up from $625 per ton at the end of last year.

The increased costs have pushed up corn prices by 13.3% and soybeans by 22.6%. The fertilizer market has been affected by rising natural gas and ammonia prices, forcing farmers to use less fertilizer due to higher costs, which in turn weighs on global yield expectations.

Kutay Guzgor, investment research director at Participation Bank Kuveyt Turk, notes that logistical bottlenecks have affected diammonium phosphate production, with a significant portion of the sulfur and ammonia supplies passing through the Strait of Hormuz creating persistent rigidity in phosphate fertilizer prices.