A new white paper from the Agricultural Risk Policy Center (ARPC) at North Dakota State University examines how global fertilizer markets adjusted following the March 2026 closure of the Strait of Hormuz, one of the most significant disruptions to fertilizer trade since the 2022 Black Sea crisis.

The report, Four Months After the Strait of Hormuz Closure: Fertilizer Market Adjustment and a Revised Outlook (ARPC White Paper 2026–09), authored by Ming Wang, Rwit Chakravorty, Shawn Arita, and Sandro Steinbach, analyzes fertilizer market responses using updated market data, international trade flows, and revised economic modeling to assess how prices evolved following the disruption and what the outlook suggests through 2028.

The findings show that fertilizer markets responded differently across products. Urea prices retreated much faster than expected as market participants adjusted to a lower probability of a prolonged Strait closure, China resumed exports, and alternative shipping routes became available. By mid-June, benchmark urea prices had fallen below pre-disruption levels. In contrast, phosphate and ammonia prices remained elevated due to continued constraints in sulfur availability, natural gas costs, and export restrictions.

A key finding of the analysis is that reopening the Strait does not immediately restore fertilizer markets to normal conditions. While maritime traffic has improved, fertilizer shipments continue to face delays associated with mine clearance, insurance reinstatement, vessel prioritization, and infrastructure damage. These factors are expected to slow the recovery of global fertilizer supply chains even after shipping lanes reopen.

The report also finds that seasonal demand from Brazil and India could continue supporting urea prices during the second half of the year. Updated projections suggest fertilizer prices are likely to remain below the April outlook but stabilize above recent lows as markets continue adjusting to evolving supply conditions.

"The fertilizer market has evolved considerably since the initial disruption," said Shawn Arita.

"While urea adjusted much faster than anticipated, other fertilizer markets continue to reflect broader supply constraints that extend beyond the Strait itself."

The findings indicate that fertilizer markets remain vulnerable to geopolitical developments, transportation bottlenecks, and changing global trade patterns. As supply chains continue to normalize, uncertainty surrounding logistics and input availability will remain an important factor influencing fertilizer prices over the coming years.

The ARPC White Paper is available through the Agricultural Risk Policy Center at North Dakota State University: https://tinyurl.com/3kyu9fxx

Media Contact:
Agricultural Risk Policy Center (ARPC)
North Dakota State University
arpc@ndsu.edu
https://www.ndsu.edu/agriculture/arpc