Middle East fertiliser exports plunge 70%, Kpler says

Fertiliser exports from the Middle East have fallen by about 70 to 75 per cent with the Strait of Hormuz still largely closed, according to data firm Kpler. Analysts warn the shortfall could mean smaller harvests and higher food prices in 2027. "Export volumes have declined by roughly 70 per cent to 75 per cent, tightening the global supply of sulphur, nitrogen [urea], and phosphate fertilisers," Madeleine Overgaard, Kpler's senior manager of agriculture data, told The National. Shipments fell to 994,000 tonnes in September, down from 3.41 million tonnes a year earlier. She expects volumes to stay near those levels through year-end unless security in the region improves.thenationalnews.com

Gulf crude exports are recovering toward pre-war levels, but fertiliser has not followed. Attacks on vessels have made shipowners and charterers wary of the route, and Saudi Arabia's overland shipments to its Red Sea ports are too small to make up the difference, The National reported.thenationalnews.com

An outsized share of world trade

The Gulf produces only 10 to 12 per cent of the world's urea but handles 30 to 40 per cent of seaborne urea trade, Kpler data shows. It also accounts for 25 to 30 per cent of global sulphur production and up to half of seaborne sulphur trade, almost all of which passes through the strait. The war began on February 28 with US and Israeli strikes on Iran. More than six months later, fertiliser shipments from the Gulf remained largely halted, according to the International Food Policy Research Institute.ifpri.org+1

Sulphur squeeze hits phosphate output

Sulphur is a byproduct of oil and gas refining and a key input for phosphate fertiliser, and the shortage has pushed producers to cut output. Mosaic ↗ 0.88% has idled or slowed several phosphate plants because of high sulphur costs. Nutrien ↗ 1.37% reported a gross margin loss on phosphate products in the second quarter. In mid-October, Mosaic said it would temporarily close one of its phosphate rock mines in Florida. Sulphur prices have stayed above $1,000 a tonne, and phosphate producers in Egypt, Brazil and India have also reduced production.global-agriculture.com+2

Food price risks

"Fertiliser deficits experienced today may inevitably show up in reduced harvests and higher food inflation downstream next year," Overgaard said. The UN Food and Agriculture Organization's food price index averaged 136 points in September, up 5.8 per cent from a year earlier. China has become the main swing supplier, and Russia has picked up some of the lost demand. Still, "none of these fully closes the supply gap, and they close it at a higher price," said Rajeev Pandey of Rystad Energy.thenationalnews.com

A UN plan to move fertiliser ships through the strait is still on hold until Washington and Tehran agree to it. "It's absolutely crucial to get the deal in the next few weeks. Otherwise, we will miss the planting season," UN Under-Secretary-General Jorge Moreira da Silva told Reuters.producer.com