Rising fossil fuel prices affect nearly every industry because the global economy depends on fuel to transport goods and people. The agriculture sector is particularly vulnerable, and higher energy costs can quickly drive up fertilizer prices.
Fertilizer production is closely linked to natural gas prices. Natural gas provides both the energy and chemical feedstock needed to produce ammonia, the primary building block of nitrogen fertilizer. Natural gas prices have surged in recent months amid the conflict involving Iran, and fertilizer prices have risen as well. Fertilizer manufacturing is also a significant source of greenhouse gas emissions, accounting for approximately 2% of global emissions.
Global fertilizer trade is facing additional disruption. Approximately one-third of the world’s seaborne fertilizer shipments pass through the Strait of Hormuz, which has been effectively closed to commercial traffic because of the conflict. According to a recent report, a prolonged closure could further restrict fertilizer access in some of the world’s poorest countries. The United States produces most of the nitrogen fertilizer it needs domestically, although it still imports some supplies from the Persian Gulf.
In April, urea—the world’s most widely used fertilizer—climbed to more than $850 per metric ton. That price is approximately 80% higher than before the conflict and represents the highest level since 2022, when Russia’s invasion of Ukraine triggered record fertilizer prices. Although prices have since declined, the market outlook remains uncertain.
“There’s an out-of-control supply chain, and it’s more volatile than ever,” said Travis Frey, chief technology officer at Pivot Bio, a company developing gene-edited microbes designed to help crops obtain nitrogen. For more information about how these microbes work and what additional research is needed, see my latest article.
Source: www.technologyreview.com