Fertilizer makers jumped after Hamas’ surprise attack on Israel raised concerns over how the conflict could impact global supplies of nutrients used to grow crucial food crops.
Further, if Iran, a critical nitrogen exporter in the region, is drawn into the conflict, Isaacson said prices of the nutrient needed for grain production could spike due to limited supply and potential premiums in benchmark Dutch TTF natural gas, a commodity used to make nitrogen-based fertilizers.
Global fertilizer prices had significantly cooled this year after surging in 2022 due to supply disruptions from the war in Ukraine.Potential involvement from Iran in the Israel conflict could endanger movement of vessels through the Strait of Hormuz, a vital conduit that Tehran has previously threatened to shut down. A third of traded liquefied natural gas passes through the waterway, Isaacson noted.