Global Food Crisis Looms as Iran War Threatens Fertiliser Supplies
The chief executive of one of the world's largest fertiliser companies has issued a stark warning that global food supplies could be severely damaged this year if the Iran war becomes a prolonged conflict. Svein Tore Holsether, CEO of Norway's Yara International, stated that extended hostilities could have catastrophic consequences for agricultural production worldwide.
Critical Supply Chain Disruptions
Holsether emphasized that the fertiliser industry has suffered what he described as "a double impact" from the conflict. First, supplies of raw materials from the Gulf region have been choked off, and second, the price of natural gas—essential for capturing nitrogen from the air in fertiliser production—has skyrocketed. Approximately one-third of the world's urea and about a quarter of globally traded ammonia, both key components in plant nutrients, originate from the Gulf region.
Since the war began two weeks ago, the cost of these raw materials has surged dramatically. Urea prices have increased by approximately $210 per tonne, rising from $487 per tonne just before the attack on Iran to $700 currently. This sharp escalation directly threatens agricultural productivity across multiple continents.
Potential for Catastrophic Crop Reductions
The Yara CEO provided specific examples of how fertiliser shortages could translate into food production declines. "For some crops, if they don't get the fertiliser, you can see a reduction of up to 50% in the first harvest," Holsether explained, specifically referencing European summer crops including early potatoes. He further warned that if the Strait of Hormuz—a critical shipping channel—were closed for an entire year, the consequences would be catastrophic for global nutrition.
"We are talking nutrition for plants, and if they don't get the nutrition, then you will see significant reductions in the farm yield," Holsether stated. The potential impact extends beyond immediate harvests to long-term food security for vulnerable populations worldwide.
Disproportionate Impact on Vulnerable Nations
Holsether expressed particular concern about how soaring fertiliser prices would affect the world's poorest countries. He noted that Europe and other wealthy regions would likely outbid developing nations in the global auction for limited fertiliser supplies, creating what he called "a big burden for farmers" in Africa and beyond.
"The countries that are most vulnerable still pay the highest price," Holsether observed. "In a global auction for fertiliser, Europe will have a stronger buying power than poorer parts of the world. We need to keep in mind the magnitude of this before it is too late." His comments echo concerns raised by the UN World Food Programme, which has warned that rising food and fuel prices driven by the Middle East conflict could worsen hunger for vulnerable populations regionally and globally.
Historical Context and Global Reach
Yara International, established in Norway in 1905 specifically to combat European famine, has grown to become the world's largest producer of nitrogen-based mineral fertilisers. The company operates production facilities across Europe in the Netherlands, France, and Germany, as well as in India and South America, giving it unique insight into global agricultural supply chains.
Holsether described the current situation as "a regional conflict with global implications that goes straight into the food system." Production in Qatar and Iran has already been reduced as a direct consequence of the war, while some Asian governments have implemented gas rationing measures that further constrain fertiliser manufacturing capacity.
The Yara CEO's warning comes as global leaders grapple with the broader implications of the Middle East conflict. Holsether has called on policymakers to consider the impact of soaring food prices on food security before irreversible damage occurs to agricultural systems and vulnerable populations worldwide.
