By Jessica Domel
Multimedia Reporter

Global tensions and conflict continue to impact fertilizer supplies and the supply chain, resulting in higher prices and availability issues in the United States and other countries.

“Fertilizer is a globally-traded commodity that is subject to fierce competition and global supply and demand,” Corey Rosenbusch, president and CEO of The Fertilizer Institute, said at a hearing hosted by the Senate Committee on Agriculture, Nutrition and Forestry. “To understand that supply and demand, we really have to begin with geopolitics starting with Iran.”

Since the conflict with Iran began, they have closed off all or part of the Strait of Hormuz, a narrow and critical waterway that is used to transport oil and liquid natural gas supplies out of Persian Gulf states.

“Closure of the Strait of Hormuz impacted about 34% of globally traded urea, 20% of phosphate and half of the world’s sulfur exports,” Rosenbusch said.

While the closure of the strait has received a lot of media attention due to its importance, Rosenbusch said it’s only part of the story.

“There have been 31 ammonia plants in the region that have curtailed production or have been damaged during the conflict. Another 49 plants in India and South Asia were also shuttered due to disruption of their natural gas supply from the region,” he said.

This exacerbated an already tight global fertilizer supply.

“China, who is the world’s largest producer of fertilizer with about a third of all nitrogen production and 43% of the global phosphate supply, are currently restricting all of their exports,” Rosenbusch said. “Twenty Russian nitrogen plants have been damaged due to Ukrainian drone strikes, and Russia also has implemented an export ban on their fertilizer or restriction.”

At the same time, globally, there’s strong demand for fertilizer.

“For example, in India, the world’s second largest consumer of fertilizer behind China, their federal government procures their fertilizer. They then heavily subsidize it to keep prices low for their farmers,” Rosenbusch said. “Because the significant volume of urea was stranded behind the strait, India recently did another urea tender for 2.5 million metric tons of urea at nearly a thousand dollars per metric ton.”

A week later, India announced an import tender for 1.2 million tons of diammonium phosphate (DAP) and 0.4 million tons of triple superphosphate (TSP).

India also has an outstanding tender for .3 million tons of ammonium sulfate.

The scale of these orders, according to Rosenbusch, dramatically exceeds the buying power of individuals throughout the rest of the world.

The war in Gaza has also limited the sale of Israeli natural gas to Egypt that had gone into the production of nitrogen fertilizers.

“Going forward in a very complex and ever changing market situation as U.S. farmers complete their spring fertilizer applications, TFI foresees that continued global conflicts, geopolitics and government interventions are likely to impact the fill and application periods this fall,” Rosenbusch said in his written testimony.

The full Senate Ag hearing, which also included testimony from Eddie Melton, Kentucky Farm Bureau Federation president, and Trent Kubik, South Dakota Corn Growers president, is available here.