Global Food Shortage

The ongoing war in Iran has caused a disruption in the global supply of fertiliser, which is essential for food production. Nearly half of the world's traded urea is exported from Gulf countries via the Strait of Hormuz, making global agriculture highly exposed to any disruption. Recent disruptions to gas supplies and shipping have already forced fertiliser plants in the Gulf and beyond to shut or cut their output. The US is already close to 25 percent short of fertiliser supply for this time of year, and urea export prices from the Middle East have surged by about 40 percent. The price is currently close to 60 percent higher than this time last year. Asian countries are most heavily dependent on Gulf fertiliser exports, receiving 35 percent of Gulf urea exports. The shortage of fertiliser could trigger a global food crisis, with experts warning that nitrogen fertiliser prices could roughly double from current levels and phosphate prices could climb by about 50 percent. The closure of the Strait of Hormuz could disrupt as much as one-third of global fertiliser trade, with only a handful of Indian, Pakistani and Chinese-flagged vessels allowed to pass safely in recent days.