Russia's Fertiliser Windfall Fuels Global Food Insecurity

Russian fertiliser companies made an estimated £500m windfall from one type of fertiliser alone this spring as the closure of the Strait of Hormuz sent global prices soaring.

The blockade, which was triggered by Iran's war, affected the global supply chain and led to a shortage of nitrogen fertilisers such as urea. Russia is the world's leading exporter of these products, and its companies earned over £5m a day in extra revenues from urea between March and May this year.

The high prices were due to the fact that Russia's exports are largely unaffected by the blockade, while other major producers rely on the Strait of Hormuz for their exports. Additionally, Russia's abundant natural gas means that its fertiliser manufacturers are insulated from the increased cost of feedstocks that are hitting competitors.

The fertiliser price shock has intensified fears over global food security and rising food prices. The worst effects of a global nitrogen fertiliser shortage are likely to hit the world's poorest countries, particularly in Africa, most severely, said Svein Tore Holsether, CEO of Norwegian fertiliser giant Yara.