agriculture
Disruptions to shipping through the Strait of Hormuz could significantly impact global agriculture prices, warns Goldman Sachs. The conflict has already led to a 40% jump in nitrogen fertilizer prices, which may result in reduced crop output and higher production costs globally.
The Strait of Hormuz is a key route for the global nitrogen fertilizer market, accounting for 60% of total fertilizer use. Over a quarter of global nitrogen fertilizer trade passes through the strait. Since the Middle East conflict began, nitrogen fertilizer prices have risen 40%. This increase reflects tightening supply and higher input costs. Fertilizer shortages may lead to lower crop yields due to delayed application. The impact will vary by region, with the US relatively insulated and Europe, Australia, and the Southern Hemisphere facing greater disruption.
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