Food for thought: Iran war strangles fertiliser supply, food costs to surge

Hanoi: Farmers around the world are feeling the squeeze of the Iran war. Gas prices have shot up and fertiliser supplies are waning due to Tehran’s near shutdown of the Strait of Hormuz in retaliation for US and Israeli bombing.

The fertiliser shortage is putting the livelihood of farmers in developing countries — already troubled by rising temperatures and erratic weather systems — further at risk, and could lead to people everywhere paying more for food.

The poorest farmers in the Northern Hemisphere rely on fertiliser imports from the Gulf, and the shortage comes just as planting season begins, said Carl Skau, deputy executive director of the World Food Programme. “In the worst case, this means lower yields and crop failures next season. In the best case, higher input costs will be included in food prices next year.”

Iran is seriously limiting shipments through the Strait of Hormuz, a narrow passage that usually handles about a fifth of the world’s oil shipments and nearly a third of global fertiliser trade. Nitrogen and phosphate — two major fertiliser nutrients — are under immediate threat from the blockade.

Supplies of nitrogen including urea, the most widely traded fertiliser that helps plants grow and boosts yields, are the hardest hit because of shipping delays and the soaring price of liquefied natural gas — an essential ingredient.

The conflict has restricted about 30 per cent of global urea trade, said Chris Lawson of CRU Group, a London-based commodities consultancy.

Some countries are already facing critical shortages, according to Raj Patel, a food systems economist at the University of Texas. For example, Ethiopia gets over 90 per cent of its nitrogen fertiliser from the Gulf through Djibouti, a supply route that was strained even before the war began in February. “The planting season is now,” Patel said. “The fertiliser isn’t there.”

Phosphate supplies, which support root development, are also under pressure. Saudi Arabia produces about a fifth of the world’s phosphate fertiliser, and the region exports more than 40 per cent of the world’s sulfur, a key ingredient and byproduct of oil and gas refining, Lawson said.

Even after the war ends, producers in the Gulf would need clear security guarantees before resuming shipments through the strait, and insurance costs would almost certainly rise, said Owen Gooch, an analyst with London-based Argus Consulting Services.

“The food system is fragile, and it depends on stable fertiliser supply chains to ensure farmers can produce the food the world relies on,” said Hanna Opsahl-Ben Ammar of Yara International. Agencies

The exchange underscores continuing tensions between Washington and Tehran, with conflicting narratives emerging from both sides regarding the status of diplomatic engagement and the potential for escalation in the region.