Fertilizer Prices Jump as War Disrupts Trade

The clearest early read on a war shock is not always crude. Sometimes it shows up first in the things that sit one layer below food, chemicals, and transport. In the first half of March, that is what happened in fertilizer. Reuters reported on March 13 that China moved to release fertilizers from national commercial reserves ahead of spring planting after the effective closure of the Strait of Hormuz disrupted global supplies. The release came earlier than usual, and covered nitrogen, phosphate, and compound fertilizers. That is not a story about sentiment. It is a story about a state trying to get in front of a supply squeeze.

The market had reasons to be tight even before the war shock. Reuters said China, the world’s largest urea producer, has tightly controlled exports and had issued no export permits this year as of March 13. That matters because a thinner export market does not need a full supply break to reprice. It only needs one major route to stop clearing normally.

The Strait of Hormuz is usually described as an energy chokepoint, and it is one. The U.S. Energy Information Administration says 23.2 million barrels per day of oil moved through it in the first half of 2025, equal to 29% of global seaborne oil trade. But the same corridor is also deeply embedded in fertilizer trade. The International Fertilizer Association said this week that in 2024 Iran, Qatar, Saudi Arabia, the UAE, and Bahrain accounted for 23% of global ammonia trade, 34% of global urea trade, and 18% of global ammoniated phosphate trade. It also said nearly 18.5 million tonnes of urea moved via Hormuz last year.

That is what makes this move more than an energy echo. Nitrogen fertilizer starts with ammonia, and ammonia depends heavily on natural gas. Phosphate chains depend on sulfur, and the International Fertilizer Association says nearly half of global sulfur trade also moves through Hormuz. So the same disruption can hit feedstock, processing, and shipping at once.

The visible price move has been sharp. Argus reported on March 2 that New Orleans urea barge prices jumped roughly $50 to $80 per short ton in one day, or 11% to 17%, from February 28 levels. By March 13, Argus said NOLA urea had risen nearly $155 per short ton from pre-war levels. FAO’s new note on the agrifood effects of the conflict said Middle East granular urea prices climbed above $590 per tonne in the first week of March, up about $90 from late February. Those are not small adjustments. They suggest the market is paying up for replacement supply, timing certainty, and route risk all at once.

The transport layer is moving in the same direction. Reuters reported on March 4 that marine war-risk premiums had risen, and that at least 200 ships were anchored in open waters off major Gulf producers. On March 12, Reuters said freight rates were rising every day, with war surcharges and emergency fuel surcharges being added as traffic through Hormuz remained badly impaired. In a market already short on easy substitute tons, that kind of friction can matter almost as much as outright outages.