Shares of fertilizer stocks are trading higher Thursday amid concern that the ongoing closure of the Strait of Hormuz will limit exports from key Middle East producers Saudi Arabia and the UAE.
According to Business Insider, conflict in the Middle East has disrupted shipping through the Strait of Hormuz, a critical route for global fertilizer trade, driving a rally in fertilizer-related stocks.
The waterway is a key transit point for fertilizer products and materials such as urea, ammonia, sulfur and nitrogen used in global agriculture. Analysts warn that disruptions to shipments through the strait could significantly impact fertilizer supply and prices worldwide.
The Middle East accounts for a substantial share of global fertilizer exports, with roughly 25% to 35% of fertilizer trade passing through the Strait of Hormuz.
As exports from producers in the region face potential constraints, fertilizer prices have risen, lifting shares of companies tied to the sector.
Shares of fertilizer stocks including Nutrien Ltd.
Fertilizer Stocks Climb
Price Action: At the time of publication, CF shares are trading 7.30% higher at $128.90, Nutrien shares are trading 6.72% higher at $84.64, and Mosaic shares are 4.67% higher at $30.51, according to data from Benzinga Pro.
