🛢🚜🌾 Fertilizer Shock Escalates as New Supply Risks Emerge

The focus since the conflict began has been on urea, a key nitrogen fertilizer used on corn. Prices for the nutrient have surged as the war blocks shipments through the Strait of Hormuz, sending farmers scrambling to procure supplies. What’s been largely overlooked in the chaos is the risk to phosphate fertilizers — key for crops like soybeans, a cornerstone of food production.

The Middle East accounts for only about a fifth of global trade for three key phosphate products, according to The Fertilizer Institute. But almost half of the world’s supply of sulfur — which is turned into sulfuric acid for the processing of phosphate fertilizer — comes from countries in the Middle East vulnerable to disruptions in the Strait of Hormuz.

The effects along the supply chain could start to be “exponential” if the conflict continues for much longer.

That’s bad news for the global food supply, which counts on phosphate to support the growth of everything from soybeans to potatoes. The conflict is already raising concerns over inflation and food security. It’s also the latest threat to US farmers, who were already weathering years of high production costs. Nearly 80% of the US’s phosphorus is applied to its soy and corn fields, which in turn are processed both into livestock feed and fuel.

Even before the conflict, supplies of both phosphate and sulfur were already tight. Sulfur prices had surged to record highs, driven in part by demand from the mining industry, which uses sulfuric acid to extract metals such as copper and nickel. Russian exports have been constrained by the war in Ukraine and an export ban, while China has curbed phosphate shipments to prioritize domestic use.

US policy has added further strain. Duties imposed in 2023 on Moroccan phosphate — still in place — and broader tariffs implemented last year by President Donald Trump have limited imports.

Efforts were made to rebuild inventories, particularly of phosphates, after fertilizer was exempted from some tariffs late last year but the real challenge is on sulfur supplies. The conflict in Israel had already raised sulfur prices so much that some phosphate production had shut down.

Fertilizer producers will be squeezed as competing buyers, particularly mining companies, will be able to pay more, said Faraz Ahmed, a director at Montage Commodities, a trading house based in the United Arab Emirates. The impact to phosphate fertilizer prices could come as soon as April, when India typically steps up purchases for its domestic production — a move that could push the market in “panic mode,” he said.

The situation is intensifying calls in the US for more stability in the markets. Farmers depend on three main families of fertilizer products: nitrogen, phosphate and potash. Only the latter, which is largely sourced from Canada and is applied alongside phosphate to soy crops, is largely insulated from the current global supply shock.

Farm groups are urging the government to suspend duties on fertilizer from Morocco, which holds the world’s largest phosphate rock reserves, arguing that high prices and geopolitical risks have already reduced the need for protectionist measures.

🔗 https://archive.ph/9Axri

🇮🇷⚔️🇺🇸🇸🇦 The IRGC released new satellite images of its operations against U.S. assets in the Gulf Countries.

The IRGC destroyed an AN/FPS-117 Radar at the Rafha military base in Saudi Arabia, some ~30 mi (48km) from the Saudi-Iraqi border.

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🇮🇷⚔️🇸🇦 The IRGC released satellite images of the damage inflicted on the Ras Tanura and Yanbu ARAMCO oil refineries.

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🇮🇷⚔️🇦🇪 The IRGC published satellite images showing damage to two data centers in the UAE.

Amazon reported outages to its Amazon Web Services servers in the Middle East as a result of Iranian attacks a few weeks ago.

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🇺🇸♨️ The U.S. is confronted with a historic heatwave not seen since the Dust Bowl of the 1930s, concentrated in the nation's agricultural heartland, with disastrous effects for this year's harvest, as the prairies were dealing with an already severe drought and depleted aquafers.

With shortages of fertilizers and a record breaking heatwave, 2026 is looking to be one of the worst years for American agriculture with incalculable consequences for the rest of the globe.

While the biggest importers of American food in 2024 were countries like Mexico, Canada, China etc. the worst affected by a decline in the crop harvest will be the island nations of the Pacific Ocean, Fiji, Vanuatu, Tonga, Marshall Islands, Micronesia, Kiribati, and overseas territories of France, the U.S. and UK, like New Caledonia, Guam, Cook and Pitcairn Islands etc.

A decline in the American harvest coupled with fuel crises hitting Australia and New Zealand and a real likelihood of China banning food exports to safeguard internal consumption will amplify the crisis for these tiny island nations.

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