Fertilizer Groups Cut Production as Hormuz Crisis Triggers Sulphur Shortage

Key Facts

In a move reflecting heightened geopolitical risks to global food supply chains, major fertilizer groups have begun cutting production levels. These reductions are directly attributed to a shortage of sulphur, a critical raw material, caused by shipping disruptions in the Strait of Hormuz. According to reports, farmers in developing nations face significant risks of lower crop yields as they are forced to reduce the application of phosphate fertilizers.

The shortage of sulphur, a byproduct of oil and gas refining, comes at a sensitive time for the global fertilizer sector which is already grappling with cost volatility. Compared to last year's performance, market data suggests that phosphate prices could face upward pressure due to supply scarcity, while industry giants like Nutrien and Mosaic face challenges in maintaining profit margins. Per market data, continued tensions in vital waterways are driving up insurance and freight costs, further exacerbating the raw material crisis.

Investors should monitor navigation stability in the Strait of Hormuz as a decisive factor for sector stability in the coming weeks. Looking at the economic calendar, the market awaits inflation data from the UK and Canada on May 19 and 20, 2026, which may signal trends in industrial input costs. Additionally, the speech by the Fed's Waller on May 19 will provide further insight into macroeconomic expectations affecting global commodity demand.