If commercial traffic through the Strait of Hormuz remains paralyzed for months, we will witness a global food crisis on a scale that many experts would have once considered to be unthinkable. Over the past couple of weeks, there has been much written about how the closure of the Strait of Hormuz has caused the price of oil to rise, has caused the price of natural gas to soar to insane levels and has caused the average price of diesel in the United States to jump above five dollars a gallon. But I think that the bigger story is what the closure of the Strait of Hormuz could mean for global food supplies.
Normally, approximately one-third of all globally-traded nitrogen fertilizer and approximately one-half of all globally-traded sulfur passes through the Strait of Hormuz...
Another world crisis sparked by the war in Iran may also be in the offing. That's because the region's oil and gas production has made it one of the world's leading exporters of nitrogen fertilizers, which are indispensable to the global food system. To produce the chemicals used to grow much of the planet's crops, natural gas is broken down to extract hydrogen, which is combined with nitrogen to make ammonia, and then mixed with carbon dioxide to make urea. All told, nearly a third of the global trade for nitrogen fertilizer passes through the Strait of Hormuz, while almost half of the world's sulfur, essential in producing phosphate fertilizers, also travels through the corridor.
Even if deescalation occurs, the conflict has likely locked in a food price hike in the coming months. The longer the war continues, the greater the shock to food security as energy and fertiliser prices remain elevated.
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Normally, approximately one-third of all globally-traded nitrogen fertilizer and approximately one-half of all globally-traded sulfur passes through the Strait of Hormuz...
Another world crisis sparked by the war in Iran may also be in the offing. That's because the region's oil and gas production has made it one of the world's leading exporters of nitrogen fertilizers, which are indispensable to the global food system. To produce the chemicals used to grow much of the planet's crops, natural gas is broken down to extract hydrogen, which is combined with nitrogen to make ammonia, and then mixed with carbon dioxide to make urea. All told, nearly a third of the global trade for nitrogen fertilizer passes through the Strait of Hormuz, while almost half of the world's sulfur, essential in producing phosphate fertilizers, also travels through the corridor.
Even if deescalation occurs, the conflict has likely locked in a food price hike in the coming months. The longer the war continues, the greater the shock to food security as energy and fertiliser prices remain elevated.
Not Just Oil - Fertilizer Shock Could Be Coming And Raise Global Food Prices
If commercial traffic through the Strait of Hormuz remains paralyzed for months, we will witness a global food crisis on a scale that many experts would have once considered to be unthinkable.
