Agri Market Risks Underpriced During Hormuz Crisis

The Strait of Hormuz closure and subsequent fertilizer shortages pose significant, underpriced risks to global agricultural markets for the 2026/27 season. While Europe is currently stable, Southern Hemisphere producers like Brazil face major yield and supply risks as inventories are drawn down.

Key Takeaways

• 1.Fertilizer-related risks are underpriced in agri-commodity markets despite the ongoing Strait of Hormuz closure.
• 2.Global fertilizer usage is expected to decline in the 2026/27 season due to deteriorating affordability (fertilizer-to-crop price ratios).
• 3.Southern Hemisphere producers, particularly Brazil, face the highest risk due to heavy reliance on fertilizer imports (85% for Brazil).

Table of Contents

• Strait of Hormuz closure continues to feed fertiliser concerns
• Both farmers and policymakers react to fertiliser shock
• Use of nitrogen-based fertilisers is more stable compared to phosphate and potash
• IFA expects 1-2% decline in global Nitrogen-based fertiliser if Iran war lasts 3-6 months
• Commodity market fundamentals favourable, for now
• Global corn ending stocks to edge lower in 2026/27, while little change expected for wheat and soybeans
• Market attention shifts towards Southern Hemisphere
• What about the fertiliser situation in Europe?
• The impact on EU crop farmers - several factors soften the blow
• Key risks and how to deal with them
• Export restrictions are still mainly focused on energy and fertilisers not on food

Document Preview

Page 1 of 5

Subscribe for full accessStart Free Trial