Middle East latest: Qatari mediators return to Tehran with latest proposal to end war

The conflict in the Middle East has led to a 70-75% drop in regional fertiliser exports, jeopardising global food production, according to analysts. The Strait of Hormuz, a key trade route, remains largely blocked due to ongoing attacks, making sea shipments from the Gulf region impractical. Saudi Arabia is transporting fertilisers overland to its Red Sea ports, but this is not a sufficient replacement for the sea-based supply chain.

Export volumes have dropped from 3.41 million tonnes in September 2022 to just 994,000 tonnes in September 2023, as reported by Madeleine Overgaard, Kpler's senior agricultural data manager. Analysts forecast that export levels will remain low through year-end unless the security situation in the region improves. The Gulf region, which includes Saudi Arabia, UAE, and Qatar, accounts for 25-30% of global sulphur production and up to 50% of seaborne trade, with these commodities critical for boosting crop yields.

The disruption has raised concerns for global food security, as fertiliser deficits could lead to lower crop yields and increased food prices. While alternative suppliers like China, Russia, and the US are stepping in, they are not enough to fully compensate for the shortfall, and at higher costs, according to Rajeev Pandey, a senior analyst at Rystad Energy.