Source: Ukragroconsult (Ukraine)
Persian Gulf urea supplies face a fundamental shortage. Specifically, the global fertilizer market cannot replace these supplies, according to Josh Linville, Vice President of Fertilizers at StoneX.
According to him, Qatar, Saudi Arabia, and Iran play a key role. Furthermore, these countries collectively account for approximately 13.5 million tons of urea exports. Additionally, there is simply no alternative production capacity globally.
“There’s no adequate substitute. When we talk about urea and look at Qatar, Saudi Arabia, and Iran, these three countries together account for 13.5 million tons of urea exports. This kind of additional production simply doesn’t exist in other parts of the world. It doesn’t exist,” Linville emphasized.
Global Impact and Natural Gas Constraints
He explained that the problem extends far beyond the Persian Gulf itself. Furthermore, restrictions on liquefied natural gas exports affect importing countries. Specifically, India uses the gas to produce its own nitrogen fertilizers.
“And that’s a big problem.” And not just for India, but for other countries as well. And not just because of that. Let’s think about ammonia. Again, three of the world’s ten largest exporters are located right there, in the Persian Gulf. They’re not shipping product right now. One of the two largest variable inputs in phosphate production is ammonia. The second largest variable input is sulfur. And guess where most of this sulfur comes from? From the Persian Gulf, from oil-producing countries,” says Linville.
Persian Gulf Urea Supplies: A Global Challenge
According to the expert, the situation is fundamentally different from preliminary price peaks. Furthermore, Linville noted that the problem is already spreading beyond the Persian Gulf. Moreover, it is beginning to impact production in other regions. Consequently, this is becoming a global challenge for both nitrogen and phosphate fertilizers.
