Market Update: Global Food Supply Faces a Dangerous Bottleneck as Iran War Persists – Full Analysis

One of the biggest economic casualties of the U.S.-led war in Iran has been the global fertilizer supply.

Shipments of it have piled up on the wrong side of the Strait of Hormuz. In India, Algeria and Slovakia, fertilizer plants have shut down or slowed their output because of rising natural gas prices. China has restricted fertilizer exports. Australian wheat farmers are planting less, and corn and soy farmers in the United States are begging President Trump for relief.

Much of the concern about economic disruptions stemming from the Iran conflict has centered on the higher price of oil and natural gas. But the cascading effects of the conflict on fertilizer supplies are growing worse by the day, raising prices for farmers globally and threatening to lead to food insecurity in some parts of the world.

Most fertilizer is made using natural gas. So the energy-rich Middle East has become a key global producer of the commodity, second only to Russia. Nearly a third of the world’s fertilizer is shipped through the Strait of Hormuz, and many other countries that produce their own fertilizer, like Egypt and Thailand, often do so using natural gas from the Middle East.

Deepika Thapliyal, a fertilizer specialist at Independent Commodity Intelligence Services, a market information provider, said that the disappearance of such a large portion of the world’s supply had led to a “very big jump” in fertilizer prices. That was leading to ramifications globally, she said, with major agricultural producers like India facing potential shortages.

The consequences have been far-reaching, impacting farmers in countries including the United States and Brazil that rely on imported fertilizer. Ms. Thapliyal said those farmers are likely to face higher prices and could be forced to pass those on to their customers. Adding to the pressure: Russia, another major fertilizer producer, was being hampered from stepping in because of drone strikes on its factories and ports from its own yearslong war with Ukraine.