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Global Fertilizer Prices Soar Amid Middle East Tensions
(MENAFN) Global fertilizer markets are under mounting strain as surging natural gas costs and deepening logistical disruptions across the Middle East continue to drive prices sharply higher.
Granular urea climbed 2.5% to $720 per ton as of 1300 GMT Wednesday, with shipping lanes through the Strait of Hormuz remaining severely constrained. The move extends a dramatic rally — urea prices have surged approximately 86% since the start of the year.
The relentless price climb reflects the energy-intensive nature of fertilizer production, with natural gas accounting for roughly 60% of nitrogen fertilizer manufacturing costs. Continued volatility in gas markets is feeding directly into production expenses, with no near-term relief in sight.
Compounding the pressure, major exporting nations China and Russia have maintained tight restrictions on outbound shipments, prioritizing domestic supply and further squeezing an already strained global market.
The consequences are now rippling into the agricultural sector. Razor-thin margins for farmers are expected to tighten further, with analysts warning that sustained price levels could begin to influence planting decisions ahead of the upcoming harvest season — raising the longer-term risk of downstream food supply disruptions.
Granular urea climbed 2.5% to $720 per ton as of 1300 GMT Wednesday, with shipping lanes through the Strait of Hormuz remaining severely constrained. The move extends a dramatic rally — urea prices have surged approximately 86% since the start of the year.
The relentless price climb reflects the energy-intensive nature of fertilizer production, with natural gas accounting for roughly 60% of nitrogen fertilizer manufacturing costs. Continued volatility in gas markets is feeding directly into production expenses, with no near-term relief in sight.
Compounding the pressure, major exporting nations China and Russia have maintained tight restrictions on outbound shipments, prioritizing domestic supply and further squeezing an already strained global market.
The consequences are now rippling into the agricultural sector. Razor-thin margins for farmers are expected to tighten further, with analysts warning that sustained price levels could begin to influence planting decisions ahead of the upcoming harvest season — raising the longer-term risk of downstream food supply disruptions.
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