Urea prices jump 46% after Hormuz disruption

The World Bank said on June 3 that disruptions to oil, gas and fertilizer flows through the Strait of Hormuz had driven a 46% month-on-month rise in urea prices and pushed agricultural price indices up 8%. The update appeared in the bank’s food security materials and in a social-media thread from WBG_AgriFood, which pointed to stalled Gulf shipments as the immediate trigger. The move extends a fertilizer rally that the World Bank had already linked in May to export disruptions and production outages across the Gulf. UN Trade and Development has separately said shipping through Hormuz fell by more than 95% after the late-February escalation, tightening flows of energy and farm inputs. ### Why does a shipping disruption hit urea so fast? UN Trade and Development said on March 30 that the Strait of Hormuz is a critical artery for energy and fertilizer trade, and that daily transits dropped from an average of 103 vessels in late February to single digits within weeks. The agency said the disruption matters for fertilizers because natural gas is a key input in nitrogen products such as urea and ammonia, so higher gas prices and lower shipping availability can hit the market at the same time. (worldbank.org) The World Bank said on May 14 that the Middle East accounts for nearly one-quarter of global urea exports, making the route especially important for nitrogen markets. In that note, the bank said urea prices had climbed above $850 per metric ton in April, up 80% since February and the highest level since April 2022. (unctad.org) ### Which parts of supply are under the most pressure? The World Bank said supply pressures intensified because the Islamic Republic of Iran halted ammonia production during the conflict, while Qatar suspended production of urea, ammonia and sulfur after damage to key facilities. That means the market is dealing with both transport constraints and reduced output from major regional producers. (blogs.worldbank.org) Farmdoc Daily, a University of Illinois publication, said in April that the strongest fertilizer-market response had been concentrated in nitrogen products, especially urea. In a separate April analysis, it said reported damage to Gulf energy and fertilizer infrastructure, delays in mine clearance, insurance normalization and backlog clearance made a quick return to early-2026 price conditions unlikely. (blogs.worldbank.org) ### Is this only a fertilizer story, or a broader food-cost story? The World Bank’s food security update said the same disruption that lifted urea by 46% also increased agricultural price indices by 8%, raising what it called the risk of an affordability crisis. The bank also said its Commodity Markets Outlook projects fertilizer prices to rise 31% on average in 2026, reaching their least affordable levels since 2022. (farmdocdaily.illinois.edu) UN Trade and Development said the shock links energy markets to food systems because rising oil, gas, fertilizer and transport costs feed into production and trade costs. The agency said the region is central to global fertilizer supply both as a producer and as a trade route, and warned that vulnerable economies face growing risks to food systems and trade. (worldbank.org) ### How unusual is this price move? The World Bank said in May that the fertilizer price index rose more than 12% quarter-on-quarter in the first quarter of 2026, its sixth increase in seven quarters, and reached its highest level since October 2022 by April. It said the current surge remains below the spikes of 2021 and 2022, when fertilizer prices jumped by more than 100% and 55%, respectively, during earlier supply disruptions. (unctad.org) The bank also said prices are expected to ease in 2027 as exports recover and new supply comes online, but it warned that risks remain to the upside if shipping and production disruptions tied to Hormuz continue beyond the third quarter of 2026. ### What comes next to watch? (blogs.worldbank.org) The Food and Agriculture Organization said its next Food Price Index release is scheduled for June 5, 2026. That update will provide the next official snapshot of how higher fertilizer and energy costs are feeding into global food-price benchmarks. (fao.org) (blogs.worldbank.org)