The price of urea fertilizer remains a challengeUrea (Granular) FOB Middle East FuturesCBOT_DL:UME1!SwissquoteAs the geopolitical situation in the Middle East continues to evolve, the market price of urea fertilizer still represents a current difficulty and a risk of future food inflation. The analysis below, published on March 11 on TradingView, reminds you why the Strait of Hormuz is critically important for exports of oil & gas, but also urea fertilizer. Urea exported from the Middle East is currently the main global price benchmark. Transactions are generally indexed to FOB Arab Gulf benchmarks, expressed in U.S. dollars, reflecting the central role of the region in the international trade of nitrogen fertilizers. Countries such as Qatar, Saudi Arabia, and Oman are among the largest exporters. This USD standardization enables global comparability and makes this pricing a reference point for trade flows between producers and importers. A significant share of global urea exports therefore transits through the Strait of Hormuz. It is estimated that around 30% to 40% of global urea flows pass through this maritime route. This gives the area systemic importance and explains why the Middle East urea price (quoted in USD) has surged to over $850 per ton. The current and future challenge is that rising urea prices act as a leading indicator of inflationary pressures on food prices. Urea is a key input for cereal crops, particularly during sowing periods when farmers adjust their production costs. An increase in fertilizer prices quickly translates into higher agricultural variable costs, which are then passed on to food prices during the distribution phase. In the current sowing context, this dynamic suggests future upward pressure on global food inflation, which could become visible during harvest and distribution periods. Fortunately, sowing periods do not occur simultaneously worldwide and also depend on the type of crops. However, the longer Middle East urea prices remain elevated, the higher the risk of food inflation. The chart below shows the daily closing price of Middle East urea fertilizer in USD per ton. DISCLAIMER: This content is intended for individuals who are familiar with financial markets and instruments and is for information purposes only. The presented idea (including market commentary, market data and observations) is not a work product of any research department of Swissquote or its affiliates. This material is intended to highlight market action and does not constitute investment, legal or tax advice. If you are a retail investor or lack experience in trading complex financial products, it is advisable to seek professional advice from licensed advisor before making any financial decisions. 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