Sulfur has become particularly important as one of the essential elements in the modern industrial system, especially in agriculture. Before the onset of the Iran war, 24 percent of the global sulfur supply was transported through the Strait of Hormuz, but with the Iranian government's claimed control over this strait, there is no reliable information about the current status of sulfur shipments, and it is likely that the amount is close to zero.
Increase in Sulfur Prices and Its Impact on Agriculture
The price of sulfur at the beginning of the Iran war was around $500 per ton, whereas it has now risen to over $800. In June, some customers paid over $1,000 for Canadian sulfur, setting a new record. These high prices severely threaten the supply of phosphate fertilizers, which require sulfuric acid for their production. In fact, 50 percent of all sulfuric acid is used for fertilizer production, with 42.5 percent allocated to phosphate fertilizer production and 7.5 percent to ammonium sulfate production as a source of nitrogen and sulfur.
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Reasons for the Decrease in Sulfur Supply
The sharp decrease in sulfur and nitrogen supply, especially in the Gulf countries currently involved in the Iran war, has exacerbated the global food crisis. When Iran took control of the Strait of Hormuz, not only did oil shipments drastically decline, but other key materials were also affected. In the past, sulfur was primarily extracted from surface and underground mines, but due to government policies in the early 1990s aimed at reducing acid rain from fossil fuels, the oil and gas industry turned to sulfur extraction as a byproduct. Given that 90 percent of the global sulfur supply is currently sourced from oil and gas refineries, replacing it with production from previously exploited mines is nearly impossible in the short term.
Currently, phosphate fertilizer producers are facing financial challenges and cannot pass the increased costs onto farmers, who themselves are suffering from rising fuel and nitrogen fertilizer prices. Meanwhile, the mining industry, which relies on sulfuric acid for extracting metals such as copper and uranium, is benefiting from the rising prices of these metals.
The high input prices and adverse weather conditions predict a decline in global food production next year. This situation has raised concerns for farmers and policymakers who need immediate solutions to address this crisis.
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