How the Strait of Hormuz Closure Disrupted Global Fertilizer Trade: Prices, Export Restrictions, and Food Security Risks

The IFA's Medium-Term Outlook (July 2026) confirms that maritime traffic "has almost completely stopped" since February 28, with AIS vessel tracking data showing only 4 sulfur vessels and 2 urea vessels able to exit the Gulf through Hormuz between late February and the end of April .

Urea Price Surge

Nitrogen (urea) prices climbed above $850 per metric ton in April 2026, up 80% since February and the highest since April 2022, according to the World Bank . The World Bank data from May 2026 confirms this spike, attributing it directly to export disruptions following the closure . A WTO-linked post noted that the combined effect of the Hormuz closure, Russia's export halt, and China's restrictions had effectively doubled urea prices . The AMIS Market Monitor (July 2026) also states that local urea prices increased by more than 35% in the first two weeks following the disruption .

Near-Total Collapse of Tanker Traffic

The Council on Foreign Relations (CFR) reports that the closure reduced tanker traffic by more than 95% . Reuters confirmed that the near closure sharply reduced fertilizer shipments . A report from the Global Trade Alert notes the Hormuz blockage cut off "around a third of globally traded urea, 45 percent of sulfur exports, and 30 percent of ammonia" . Another source states tanker traffic collapsed by more than 90% .

Export Restrictions and Policy Responses

The FAO's May 2026 agrifood policy highlights confirm that exporters actively imposed restrictions to protect domestic markets . China extended export restrictions on urea until August 2026 and introduced a quota on sulfuric acid, cutting overseas supply by 45% before halting exports from May . The Global Trade Alert's March 2026 Monthly Roundup explicitly flags "energy and fertiliser export restrictions in response to the Hormuz crisis" as a key trend . A separate analysis notes that governments around the world took 286 policy measures linked to the Gulf conflict as of April 2026 .

The Specific Vulnerability of Brazil

Brazil is the world's largest agricultural exporter but depends on imports for over 80% of its fertilizer needs. Multiple sources confirm Brazil relies on Gulf-sourced urea for approximately 40% of its nitrogen requirements . The country's Agriculture Ministry classified the fertilizer supply outlook as "extremely high risk" for the 2026/27 harvest . The ministry estimated a potential deficit of 1 to 3 million tonnes of phosphate fertilizers in 2026 . Roughly 41% of Brazil's urea imports transited the Strait of Hormuz before it closed . An IEEE analysis notes that Brazil, along with India and West Africa, faces risk of shortages if disruptions persist .

World Bank and FAO Warnings on Food Security

The World Bank's May 2026 blog post states the fertilizer price surge drove a 46% month-on-month rise in urea prices and increased agricultural price indices by 8%, raising the risk of an affordability crisis . The World Bank's Global Markets Outlook (May 22, 2026) warns that "the Middle East conflict is increasing risks to food security" .

The FAO Director-General warned that the global fertilizer scarcity will lead to lower yields and tightening food supplies in the latter half of 2026 and into 2027 . The FAO Chief Economist had earlier warned of severe global food security risks from disruption to the Strait of Hormuz trade corridor . The FAO's June 2026 Market Monitor notes that fertilizer markets showed some signs of easing following improved flows through the strait .

The Absence of Strategic International Fertilizer Reserves

The question of strategic international fertilizer reserves is more complex. No single WTO report or statement explicitly declares the absence of such reserves. However, the broader context from multiple analyses makes clear that no coordinated international buffer stock mechanism exists for fertilizers. The market was caught unprepared by the scale of the disruption, as noted in the CFR analysis which states that the closure "has cut off a third of globally traded fertilizer at the start of the Northern Hemisphere planting season, with no strategic reserve and no fast substitute" .

Caveats

It is important to note that no single, standalone "WTO July 2026 report" containing all the findings described here was located. The WTO's trade monitoring and analytical outputs for this period are distributed across multiple products. The credible range for affected global fertilizer trade is 20–30%, not the exact figure of 15%. The phrase "extremely high risk" for Brazil's harvest appears in news reporting but was not confirmed in a specific WTO document. Some sources, such as InformedClearly.com, are aggregators and may not be primary sources.