UK Nature and Environment

Keys facts: According to the United Nations Conference on Trade and Development, about a third of the global seaborne trade in fertilisers pass through the Strait of Hormuz(1). Essential components of fertiliser like urea and ammonia are made with energy-intensive production processes including gas. This means that, for efficiency, production tends to be clustered near low-cost gas producers, particularly around the Persian Gulf in countries like Qatar, Saudi Arabia, Bahrain the UAE and Iran. This density meant that a single Iranian strike on a Qatari facility has been reported as disrupting 1/7th of global urea production. Volatility in supply is likely to continue(2).

Fertiliser costs are surging for the second time in just 5 years after similar trade disruptions following the invasion of Ukraine caused fertiliser prices to spike to $815 per tonne in April 2022. This is more than four times the price of just over $200 per tonne in 2020(3). Arguably the situation is worse this time round as there is less spare production capacity elsewhere to fill the gap.

UK farmers – as well as those elsewhere – are rightly highlighting the risks of higher farm input costs, especially of red diesel and fertiliser, because of the Iran conflict. They are also simultaneously facing increasingly unpredictable and extreme weather events due to accelerating climate change. The deluges that put productive fields underwater in 2023/24 led to millions of pounds of government intervention to protect farmers with flooded fields.