It’s not just oil and gas. The Strait of Hormuz blockage is rattling another vital commodity

Farmers in the northern hemisphere are heading into the crucial spring months, during which major fieldwork must begin. Their peers in the south, meanwhile, are busy harvesting crops before the winter sets in. However, their work now takes place, as the Iran war creates serious supply constraints for essential fertilizer products — fueling massive price spikes and warnings of looming food insecurity. Around one-third of the global seaborne fertilizer trade passes through the Strait of Hormuz, according to the UN. The waterway, a critical shipping route that runs along Iran's southern border, has been severely disrupted since the start of the war, with traffic effectively coming to a halt and several ships being hit by projectiles in or near the waterway. Since the U.S. and Israel launched strikes on Iran on Feb. 28, the price of fertilizer — much of which is produced in the Middle East — has skyrocketed. Fertilizer futures contracts are less liquid than other commodities, making prices more opaque. But analysts working in the sector told CNBC that they had seen the cost of FOB granular urea in Egypt — a bellwether of nitrogen fertilizers — jump to around $700 per metric ton, up from $400 to $490 before the war began. In a Monday note, Oxford Economics' Alpine Macro said urea and ammonia prices had surged by around 50% and 20%, respectively, since the war began. Other fertilizers, like potash and sulfur, have also risen in price. The Middle East is a particularly large exporter of urea and nitrogen products, according to Chris Lawson, VP of market intelligence and prices at CRU. "With the Strait of Hormuz essentially cut off, there's a big chunk of global trade that isn't able to move right now," Lawson said. "We estimate around 30% of exportable suppliers are not really available to the market right now, that is Saudi Arabia, Qatar and Bahrain, but that also includes Iran." Iran, Lawson said, is an important producer of nitrogen-based fertilizers and one of the larg...