The situation in the Strait of Hormuz pushed up global fertilizer prices: supply chain security risks highlighted

Geopolitical tensions in the Middle East are affecting the global fertilizer market. On 9 March, the Chicago Futures Exchange urea master contract reported $584.5 per ton, a 25 per cent increase from 28 February; domestic spot prices of sulphur rose to $4550 per toon, a 17 per cent rise from before the escalation of the conflict. The Hormuz Strait is responsible for about one third of the global trade in fertilizers, with exports of urein in the Gulf region accounting for 45-49 per cent of global trade, sulphur 45-50 per cent and phosphate 20-30 per cent. The International Fertilizer Association estimates that the annual global fertilizer supply gap could be between 50 million and 60 million tons if the corridor were to stagnate for a long time. At this point in time before and after spring farming in the northern hemisphere, the supply and demand nodes are highly sensitive. As the world’s largest producer and consumer of fertilizers, China has stabilized its annual consumption at about 50 million tons, or about 30% of the world. Although nitrogen fertilizer and phosphorus have become more self-sufficient, there are structural weaknesses at the feedstock end: potassium fertilizer is permanently more than 50% dependent, and sulphur is equally more than 50. About 56% of China’s imports of sulphur came from the Middle East in 2025, with a clear exposure to the supply of raw materials. The industry pattern is highly fragmented. The country ' s combined fertilizer production capacity amounts to 134.1 million tons, but between January and November 2025 it was only 47.7 million tons or 38.8 per cent of the annual chemical start-up rate. CR5 is responsible for 11.5 per cent and CR10 is only 18.6 per cent, respectively, for the establishment of competitive barriers based on the advantages of industrial chain integration by leading firms, with the New Ocean Fulbide achieving self-supply of 1 ammonium phosphate, which is expected to rise to over 30 per cent; and the cloud holding of phosphorus to the entire phosphon compound chain, with Māori accounting for 74 per cent. Fertilizer compounding rose from 22.1% in 2000 to 47.8% in 2023, but there is still a gap between 70% and 80% from developed countries. New and efficient fertilizer applications account for only 18.7% of the area used, with wide scope for industrial upgrading.