Crisis in Ormuz puts fertilizer trade at risk: UN warns of impact on global agricultural production
A third of global fertilizer maritime trade passes through the Strait of Hormuz. Photo: iStock
TL;DR
- Tensions in the Strait of Hormuz are impacting global supply chains, especially the fertilizer trade.
- The Strait of Hormuz is a strategic maritime corridor for energy and raw materials, with about one-third of global fertilizer trade passing through it annually.
- Disruptions in this route could affect international supplies of agricultural products and raise food security concerns.
- Daily vessel traffic through the Strait has significantly decreased due to geopolitical uncertainty.
- Logistical costs, including tanker freight rates, war risk insurance premiums, and marine fuel costs, are increasing.
- Energy markets have seen price hikes, with oil prices rising significantly and liquefied gas prices increasing substantially.
- Developing economies may be disproportionately affected due to existing debt and limited capacity to absorb price increases.