Hormuz Blockade Drives Fertilizer Shortages and Price Spikes in Africa

Impact of the Hormuz Blockade

The ongoing blockade of the Strait of Hormuz is severely affecting African nations, primarily through the disruption of critical agricultural inputs. Before the onset of the war in Iran, nearly 50% of the sulphur used globally in phosphate fertilizers passed through the Strait of Hormuz. The waterway also served as a primary transit point for chemical precursors, specifically urea and ammonia.

These disruptions have led to sharp price increases for essential fertilizers. Grain SA, the South African grain producers' association, reported that ammonia prices in April were more than 75% higher than they were one year prior. Similarly, the cost of urea was reported to have increased by approximately 60%.

Food Security Risks

The timing of these shortages is critical for the African continent. While the Northern Hemisphere's spring fertilizer application typically runs through June, parts of Africa are currently entering their primary planting season. This window is described as critical for the continent's populations that are most food-insecure.

While many regions have implemented national emergency protocols to handle shortages in kerosene, petrol, and diesel since the beginning of the Iran war, similar systemic solutions for fertilizer shortages have not been as widely established.

Broader Economic Context

Much of the global discourse surrounding the war in Iran has focused on energy markets, geopolitical maneuvering, and the role of the Strait of Hormuz as a chokepoint for crude oil. However, the impact on fertilizer and the resulting potential for food shortages is a slower-moving crisis that has often been overlooked in favor of immediate oil price volatility.

Agricultural fertilization generally relies on three main macronutrients: nitrogen (N), phosphorus (P), and potassium (K). The blockade specifically targets the supply chains of the precursors required to produce these nutrients, creating a bottleneck that affects the entire agricultural value chain from production to food security.