Conflict Clouds: Fertiliser Crisis Looms Amid Middle East Turbulence

The conflict involving the U.S., Israel, and Iran has entered its third week, heavily impacting fertiliser markets and threatening global food security. Analysts warn of severe disruptions to fertiliser costs, trade flows, and production output, significantly affecting developing countries.

Fertiliser production depends on natural gas, with 70% of production costs tied to energy. The Strait of Hormuz, crucial for fertiliser supply, has been largely shut. This closure, coupled with regional strikes, has halted energy and fertiliser output just as the Northern Hemisphere prepares for spring planting.

Fertiliser is vital for food production. Supply disruptions could have monumental impacts, particularly with nitrogen-based fertilisers like urea. Major producers in the Middle East, such as Qatar and India, are struggling with halted outputs. Meanwhile, global urea supplies are dwindling, with prices surging up to 40% since the conflict began.