Geopolitical tensions drive up global fertilizer and grain prices

Global agricultural markets are facing significant volatility due to geopolitical tensions and energy shortages. Fertilizer prices, particularly for nitrogen-based products, have risen following increased instability in the Strait of Hormuz, a critical route for global energy and fertilizer transport. Additionally, high natural gas prices—a primary raw material for nitrogen fertilizer production—are driving up manufacturing costs for farmers.

Simultaneously, wheat prices have seen sharp increases, driven by export disruptions in the Black Sea region. Conflict between Russia and Ukraine has impacted grain shipments, with operations at major terminals in Novorossiysk suspended following drone attacks. Given that Russia and Ukraine are projected to account for nearly 30% of global wheat exports for the 2026/27 season, these disruptions pose a substantial risk to the global food supply and increase costs for agricultural producers worldwide.