Fertiliser shortages to lift global food prices, Grosvenor warns

Mark Preston, executive trustee of the Grosvenor Group — a long-established property and farming firm controlled by the Duke of Westminster — warned that disruption from the Iran war has driven fertiliser costs sharply higher, with UK farmers facing increases of around 50–70%. He told reporters the full knock-on effects on consumer food prices are likely to materialise next year.

Preston said fertiliser was already expensive before the conflict, and that the surge since late February has elevated production costs for growers. While many producers are currently drawing on existing stocks, the elevated price base for nitrogen-based fertilisers and logistics constraints mean planting and input budgets for the coming seasons will be hit.

The supply-side shock is linked to interruptions around the Strait of Hormuz and related energy market turbulence; international organisations have highlighted fertilizer as an immediate vulnerability for food security. Reuters reported that UN-linked trade authorities and other agencies view fertiliser shortages caused by the Iran conflict as a significant concern for developing countries and global supply chains.

From a market perspective, higher fertiliser costs raise marginal production costs for key crops, creating upward pressure on wholesale and retail food prices with a lag. Commodity analysts note that while some price rises may be absorbed by margins in the short term, sustained input cost inflation typically transmits to consumer prices over planting and harvest cycles, increasing food price volatility.

Looking ahead, analysts and policy makers will monitor the duration of the conflict, gas and shipping routes, and availability of alternative fertiliser supplies. If supply constraints persist through planting seasons, the result could be broader food inflation that forces policy responses and heightens market risk premia for agricultural commodities. Investors are advised to follow developments in energy, shipping, and fertiliser production closely.