Food Increased Pricing will Move Along with Gasoline Price Increases

[tjscott0]

MSN

Global Agriculture Under Pressure as Fertilizer Costs Surge Amid Conflict**

The escalation of conflict in the Middle East has triggered a surge in fertilizer prices, leaving farmers worldwide scrambling to secure supplies as the critical spring planting season approaches. The closure of the Strait of Hormuz, a vital shipping route, has disrupted the flow of fertilizers and fuel, compounding existing challenges in global agriculture.

The ongoing conflict in the Middle East threatens global food security by disrupting the supply of nitrogen fertilizers, which are crucial for producing half the world’s food. The Persian Gulf, a key source of these fertilizers, faces challenges in delivery due to the shutdown of the Strait of Hormuz, leading to surging prices for fertilizers and related chemicals. The Strait of Hormuz, through which one-third of global fertilizer trade and 20% of export fuels pass, has become a chokepoint due to the conflict. Fertilizer plants in the region have shut down, and shipping routes have been severely disrupted.

The conflict in the Middle East could severely impact fertilizer supply, as five key exporters—Iran, Saudi Arabia, Qatar, UAE, and Bahrain—rely on the Strait of Hormuz to export over one-third of global urea, nearly one-fourth of ammonia, and a significant share of phosphate fertilizers. This disruption could surpass the effects of the Russia-Ukraine conflict, which already drove up fertilizer prices and reduced harvests.

[pauleckler]

And of course, fertilizer demand is highest in Spring when farmers are planting.

Note that much ammonia is made in USA from natural gas. And we have a pipeline that brings it to the midwest. I would be surprised if imports are a major source. But as usually import competition (except tariffs) helps keep prices down. Phosphates are mined in Florida. Potash is mostly imported from Canada.

Much ammonia gets converted to diammonium phosphate for fertilizer use. Urea and nitrates are also made from ammonia.

[tjscott0]

Might be of interest here:

source:Monopoly Round-Up: Will the Iran Price Shock Break the World?
Stoller brings up US stock market exposure to foreign ownership.

More broadly, while a lot of foreign policy thinkers talk about allies, the truth is that American alliances are anchored by foreign ownership of the U.S. stock market. We supply the dollar denominated assets and a place they can buy and sell them, at will. There are $35 trillion of equity investments in the U.S. held by foreigners. If the Iran war causes foreigners to need to sell their assets, the stock market will decline. And for better or worse, mostly worse, most American institutions, from universities to governments to corporations to the AI investment frenzy, are directly or indirectly dependent on a high stock market.

I admit it is higher than I knew.

[MataroPete]

@tjscott0

I admit it is higher than I knew.

Yeah, it’s not just the Vatican and the Dutch royal family now.

Pete