What a closure of the Strait of Hormuz could mean for global fertilizers

If the Strait of Hormuz were to close, the impact on the fertilizer complex could be severe. The nitrogen complex, and urea in particular, would bear the brunt, given the scale of the region's importance to global exports (45% of all urea exports come from this region) and the interdependencies of other nutrients, such as MAP and DAP, which use ammonia for production. However, the potential impacts could run much deeper, hitting global sulfur and phosphate prices and further testing the cost structure of growers globally. We looked at a few scenarios, comparing the price impacts of partial and full closure across different time periods. Local markets would feel the impacts differently, but the consequences would be broad.