Fertilizer prices fall on hope for US-Iran deal

Fertilizer prices are tumbling as the Iran war seems to be winding down, but food shortages are on the horizon after a disrupted planting season.

Urea is down 50% from its April peak, although phosphate fertilizer prices remain high. Part of the fall is due to demand destruction, analysts told the Financial Times, as farmers either planted less or switched to less fertilizer-hungry crops.

About 50% of total food output depends on artificial nitrogen-based fertilizers, mostly urea. A food economist told Bloomberg that it would be six months before supply chains normalized, and while it may be a year before the fertilizer spikes were reflected in food prices, “higher costs are now baked in.”