Fertilizer Prices Surge as Global Sulphur Supplies Tighten

The global fertilizer market is facing severe disruption after conflict in the Middle East and shipping problems in the Strait of Hormuz hit supplies of sulphur, a key raw material used in phosphate fertilizer production, the Financial Times reported. Producers worldwide are now scaling back output.

Before the outbreak of the war, roughly half of global sulphur trade passed through Hormuz. Phosphate fertilizers are critical for crops such as corn, soybeans, rice and palm oil.

US fertilizer giant Mosaic has already reduced production in Brazil and the United States, Moroccan producer OCP has introduced maintenance shutdowns and China has suspended phosphate fertilizer exports until at least August. India, meanwhile, has launched a record tender for 1.6m tonnes of phosphate fertilizer in an effort to secure supplies.

Sulphur prices have surged to around $900 per tonne from roughly $150-$180 last year, with some contracts nearing $1,000. Analysts warn that phosphate fertilizer production is becoming economically unsustainable at such levels.

Experts also warn that the market is fragmenting. Wealthier countries may still be able to secure supplies, while poorer regions in Africa and Southeast Asia are already reducing fertilizer use. That could lead to lower crop yields and, in the worst-case scenario, food shortages.

“We could see smaller harvests as early as next year and even famine in some parts of the world,” warned Christian Wendel of the Hexagon Group.

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