Recent tensions between the US and Iran, particularly the disruption of the Strait of Hormuz, are significantly impacting global fertilizer supplies. The Persian Gulf region accounts for approximately one-third of global urea exports, and the flow of fertilizer ships has slowed substantially since late June due to Iranian attacks on vessels. This disruption comes as the planting season approaches for Southern Hemisphere agricultural powerhouses like Brazil and Argentina, raising concerns about their ability to secure necessary fertilizer. Early estimates indicate that flows through the Strait of Hormuz dropped from 600,000 tons per week in late February to 60,000 tons in early June, with more than 40 vessels laden with fertilizer reportedly stuck in the region. Although fertilizer prices notably dropped by around 45% since their mid-April peak, the earlier spike coincided with the spring planting season, creating significant challenges for farmers.
Adding to these geopolitical issues is the increasing likelihood of a "super" El Niño event, predicted to make 2026 and potentially 2027 the hottest years on record. This weather phenomenon exacerbates the food crisis by disrupting agricultural production through extreme heatwaves and droughts. The combination of reduced fertilizer availability and adverse weather conditions is expected to lower crop yields globally. For instance, Australia's wheat harvest in 2025-26 is projected to decrease by a quarter, and corn plantings in France are expected to drop by 19% year-on-year. Farmers like Delorme are facing substantial losses, with his farm anticipating 120 tons less wheat and corn this year, translating to a revenue loss of approximately $92,870.
The combined impact of the Iran war and El Niño is projected to cause significant food price inflation and supply chain disruptions. Transport costs have already surged, with dry-bulk freight rates up 22% since the start of the war, and fuel costs for farmers like Delorme have risen from €0.70 to €1.20 per liter, adding roughly €25,000 to annual expenses. The Head Economist at the FDF, Liliana Danila, warns that supply chains may take at least six months to normalize, and longer for energy infrastructure repairs. UK food prices have already increased by 40% since 2019, and 82% of UK food and drink businesses anticipate further price increases due to the Iran war.
Experts are warning of a prolonged period of elevated food prices. James Walton, chief economist at the UK’s Institute of Grocery Distribution, suggests that consumers should not expect food prices to return to pre-crisis levels. Food manufacturers often have long-term contracts, meaning that the full impact of current cost increases may take up to a year to be reflected in consumer prices. The severe and simultaneous shocks to fertilizer supply from the Persian Gulf and agricultural production from El Niño mean that the inflationary pressures are likely to persist, making food security a critical global concern.
