FAO chief economist: Strait of Hormuz disruptions threaten crop yields

FAO Chief Economist Maximo Torero gave an interview to RIA Novosti ahead of the World Food Forum. He warned that if supply disruptions through the Strait of Hormuz make fertilizers more expensive or scarce, farmers will start applying less, and crop yields will decline in the following seasons.

According to the expert, up to a third of globally traded fertilizers pass through the strait. The exact share depends on the product type and the period. The Persian Gulf region accounts for about 30–35% of global urea exports and 20–30% of ammonia exports. The region also produces roughly a quarter of the world's sulfur and accounts for about 50% of its exports. Sulfur is needed to make phosphate fertilizers.

Torero noted that, unlike oil, "there are no alternative pipeline routes for fertilizers." Some trade flows have recovered. However, export disruptions, expensive freight and insurance are still affecting fertilizer prices and availability. Lower LNG exports and high natural gas prices are also putting pressure on the market. Gas serves as both a feedstock and an energy source for nitrogen fertilizers.

Prolonged disruptions could force importers to cut purchases or switch to more expensive suppliers. Rising global prices will affect farmers around the world. According to the economist, the impact on food security will be greatest in low-income countries that rely heavily on fertilizer imports.