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Strait of Hormuz closure restricting sulfur trade

The chief economist with The Fertilizer Institute says the conflict in the Middle East is impacting the flow of critical minerals out of the Persian Gulf.

Veronica Nigh says in addition to fertilizer and oil, inputs such as sulfur are also bottlenecked.  

“It’s an important product in and of itself, but it’s also a critical input into the production of phosphate fertilizers.”  She says, “You can’t make MAP and DAP without sulfuric acid. And sulfur is incredibly constrained because of the closure of the Strait of Hormuz.”

Sulfur is the fourth most consumed nutrient in the U.S., and Nigh tells Brownfield prices that were already up considerably year-over-year have now jumped another 25%.

“The region is almost 50% of global exports on sulfur.”  She says, “We’ve seen huge increases there.”

She says the Trump administration’s plan to increase Venezuelan oil refinement and purchases of fertilizers could eventually provide some relief to the sulfur sector.

“Sulfur is almost exclusively only a byproduct from oil refinement.” She says, “If we import more Venezuelan oil, there’s more oil refinement in Venezuela, which means there’s potentially additional sulfur coming into the market.”

Nigh says the United States produces a considerable amount of sulfur domestically, however prolonged constraints on global supplies will continue to impact prices for farmers and manufacturers.

AUDIO: Veronica Nigh – The Fertilizer Institute