Stalemate over Hormuz heightens risk to fertilizer supplies and agricultural production

Disruption to shipping through the Strait of Hormuz is beginning to affect agricultural planning and costs across the global food chain. According to information released by authorities linked to the United Nations, reduced fertilizer supplies, higher fuel and transport costs, and additional problems on the Black Sea and Red Sea routes are increasing pressure on producers and importers.

In March, the UN created a task force to facilitate the passage of fertilizers through the strait. The mechanism has not yet been implemented and depends on an agreement between the United States and Iran. If there is consensus, the structure could begin operating seven to ten days later.

The proposal provides for a coordination center in Oman to register ships and organize traffic. UN monitors would work with Gulf port authorities to verify cargo, while vessels would be tracked during the crossing. The plan considers the passage of up to five ships per day, a volume described as sufficient to maintain supplies to countries facing critical conditions.

The urgency is related to the agricultural calendar. Maintaining the blockade and the lack of clarity in the coming weeks could cause producers to miss the planting window. The uncertainty is already reported to have led farmers to reduce fertilizer use and choose crops with faster financial returns instead of higher-value crops that require more time before generating revenue.

Inventories initially helped cushion the effects of the disruption, but the duration of the problem has increased concern about productivity and prices. Higher fuel costs are also affecting mechanized operations, while agricultural commodity prices rose 13% in the third quarter, with further increases projected for the end of this year and the beginning of next year.

The Strait of Hormuz has a direct bearing on the trade in agricultural inputs. Before the disruption, the route carried approximately one-third of the urea traded worldwide and nearly half of the sulfur transported by sea. Fertilizer shipments from the Gulf remained largely halted for more than six months after the conflict began and represented a relatively small share during a truce that took place between mid-June and mid-July.

The consequences are likely to be greater in regions dependent on imports. Southeast Asian countries are particularly exposed to fuel availability, while Gulf nations depend on incoming food supplies. Estimates cited by the sources indicate that a prolonged disruption could raise prices by up to 81% for cereals, 66% for oilseeds, and 30% for animal products.

According to those responsible for the UN mechanism, the fertilizer transport operation could move forward in parallel with broader negotiations between Washington and Tehran. Without a solution in the coming weeks, however, the impact on the planting calendar could turn the maritime bottleneck into an agricultural supply and food-security problem in parts of Asia and Africa.