finance
Fertiglobe Reports Fertilizer Prices Rose Sharply as Gulf Exports Shift to Overland Routes
Ahmed El-Hoshy, CEO of the Abu Dhabi-based fertilizer exporter, said nitrogen fertilizer prices jumped sharply after conflict closed key Gulf shipping routes. About one-third of global urea and one-fifth of ammonia supplies normally move through the Strait of Hormuz. The company has shifted to trucking output while farmers delay purchases where possible.
May 14, 7:41 AM·2m read1 source
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Fertilizer prices surged by as much as 80% to more than $900 a ton after the war disrupted Gulf exports, Ahmed El-Hoshy, CEO of Fertiglobe, said. About one-third of global urea supplies and one-fifth of ammonia supplies move through the Strait of Hormuz.
Fertiglobe, based in Abu Dhabi and one of the world’s largest exporters of urea and ammonia, exports fertilizer from facilities in Algeria, Egypt, and the UAE.
The company is listed in Abu Dhabi and majority-owned by ADNOC. It has continued producing fertilizer in the UAE during the conflict, though it experienced short outages of between five and 10 days at its two production lines. Fertiglobe has resorted to trucking its output to ports beyond the Strait of Hormuz.
A single ship can move 50,000 tons of product compared with 25 tons per truck, El-Hoshy said. “The market is telling us to get it out this way,” El-Hoshy said. Higher transport costs are being recouped thanks to the spike in prices, he added.
Many farmers are trying to delay purchases until the last possible moment in the hope that Gulf supplies will be restored, El-Hoshy said. Many American farmers rely on fertilizer moving by barge up the Mississippi River ahead of the planting season, limiting their ability to defer purchases. Fertilizer prices are now far higher while crop prices have risen only modestly so far, El-Hoshy said.
“We could see less [use of fertilizers]. We could see what we call demand destruction,” he said. Nitrogen fertilizers are responsible for feeding roughly half the world’s population by boosting crop yields, El-Hoshy said.
