Yara International CEO Svein Tore Holsether warned farmers are being squeezed by surging fertilizer prices amid Middle East conflict. The price of urea in Egypt, the regional benchmark, jumped 54% over the past month. Farmers will likely scale back purchases as input costs rise while crop prices remain stagnant. This price surge threatens global food supplies.

The Middle East war disrupted shipping through the Strait of Hormuz, cutting off supplies of fertilizers made from natural gas. The region supplied nearly 30% of global fertilizer exports in 2024. This supply shock has actually boosted shares of fertilizer producers like Yara, CF Industries and K+S as investors bet on higher prices.

Yara has limited direct exposure to the region but faces rising freight and natural-gas costs. The company had to curtail production at an Indian plant due to gas shortages. Holsether confirmed Yara is setting prices according to global trends, expecting continued volatility in the near term.