Some fertilizer prices rise as Iran conflict escalates

Some fertilizer prices surged following the impact of the escalating Middle East conflict on supplies moving through the Strait of Hormuz, analysts told Reuters on Monday.

The price of urea, a dry nitrogen crop fertilizer generally made from natural gas, jumped as much as 13 per cent to $550 (C$752) from $485-$490 per tonne in Egypt, a urea producer, said Chris Lawson of metals consultancy CRU Group.

”Expect further increases,” he said.

The price jump was also reflected in imports to North America, said analyst Josh Linville of StoneX, rising about $77 to $606 (C$828) at the port area around New Orleans.

Qatar, Saudi Arabia and Iran, three of the world’s top 10 urea exporters, ship through the Strait of Hormuz, supplying a global market already struggling with tight supplies due to the lack of available cheap natural gas from Russia to European manufacturers, Linville said.

“The world is already struggling with nitrogen and just took a massive, massive hit at the worst time of the year,” he added.

Farmers in central North America can still receive urea shipped from the Persian Gulf today, but the two-month time from loading to arrival in the U.S. Midwest means any lengthy closure of the strait will make delayed fertilizer too late for farmers to use this planting season, Linville said.

If prices rise further, it could become unaffordable for farmers, many of whom were already projecting losses on this year’s crop.

— Reporting by Tristan Veyet in Gdansk and Ed White in Winnipeg