WTO warns Iran war has severely disrupted fertilizer trade

The World Trade Organization warned on Thursday that trade in urea and phosphate fertilizers has been "severely disrupted" by the conflict in the Persian Gulf, publishing new data showing the extent to which the Iran war has constrained global agricultural supply chains.linkedin+1

The WTO's data blog post, released July 10, comes days after the heads of the WTO, International Monetary Fund, World Bank, and International Energy Agency issued a joint statement on July 8 cautioning that Gulf trade flows will require time to recover even as fuel and fertilizer prices have eased somewhat from their peaks earlier in the year.wto+1

Renewed Fighting Compounds the Crisis

The warning arrives at a fraught moment. Renewed U.S.-Iran fighting this week has brought Strait of Hormuz shipping to a near-standstill, threatening to undo progress made since the two sides signed a memorandum of understanding on June 17 to reopen the waterway.aljazeera+1

Iran's military fired missiles at commercial ships on Monday night, striking at least two vessels, according to Axios. The U.S. launched retaliatory strikes against Iranian targets, NPR reported. Oil tanker traffic through Hormuz fell to just 13 crossings on Wednesday, down from an average of 33 per day the previous week, according to Kpler data cited by CNBC.cnbc+2

The strait had only partially recovered since Iran first blocked it in late February. Even after the June 17 deal, only 28 ships per day transited the waterway on average — far below pre-war levels, according to PortWatch data reported by Al Jazeera.aljazeera

Fertilizer Shortfall Threatens Harvests

The disruption has had cascading effects on agriculture. Nearly half of global urea exports pass through the Strait of Hormuz, and the closure since February constrained supplies during the critical Northern Hemisphere planting season. WTO economists noted in March that the conflict had "sharply curtailed" fertilizer trade, with roughly one-third of global fertilizer suppliers affected.npr+1

The International Food Policy Research Institute warned in a July analysis that the war has driven up both energy and fertilizer costs, "sparking fears of another global food crisis". A TD Economics analysis estimated that a 2–5 percent production shortfall in North America could add 0.1 to 0.5 percentage points to food inflation in 2027.ifpri+1

Chris Barrett, a professor of agricultural economics at Cornell University, told NPR's member station WGLT that consumers would likely see higher food prices "come September to January, once harvests start coming in," though he noted that fertilizer costs alone are unlikely to be the dominant driver.wglt

With fighting resuming and the strait's future again uncertain, the fragile recovery in fertilizer flows now hangs in the balance.