Strait shutdown sparks supply shock hitting farms and high streets

A global fertiliser crisis triggered by tensions in the Strait of Hormuz is set to push food prices sharply higher, with small businesses likely to feel the impact first. Costs have already surged by up to 70%, and while farmers may avoid the worst this year, experts warn the real squeeze will hit in the next growing season. From cafés and pubs to grocers and florists, rising supply chain costs are expected to ripple through the economy, adding fresh pressure to already stretched businesses and households.

FERTILISER CHAOS TO SEND FOOD PRICES SOARING

Small business will feel the pain as fertiliser costs rocket by up to 70% thanks to the Iran war. Experts warn the worst is yet to come and UK households are staring down the barrel of a fresh food‑price explosion next year. The fertiliser crunch will hit farmers first and have a huge impact on food prices across the world. When farmers get hit, every café, takeaway, grocer, pub and small business down the chain gets hit too.

STRAIT OF HORMUZ SHUTDOWN CHOKES GLOBAL SUPPLIES

The crisis comes from the near‑closure of the Strait of Hormuz, a vital shipping route now jammed with around 1,600 stranded vessels. It’s the main gateway for nitrogen‑based fertilisers used to grow everything from wheat and veg to animal feed. With the route blocked, fertiliser prices have shot up 50–70% since February. Fertiliser was “already expensive” before the war and now it’s becoming unaffordable. Even if the standoff over the Strait were to end tomorrow and the ships start moving again the damage has already been done. UK farmers won’t feel the full hit this year because most fertiliser was bought before the surge. But next year is when the trouble lands. Farmers are not buying fertiliser currently because of the shortages and costs. They’re delaying, hoping things will improve which they probably won’t. Less fertiliser means lower yields, higher costs, and more pressure on food prices already squeezing households and small businesses.

When fertiliser prices jump:

• Food costs rise for cafés, pubs, restaurants and takeaways

• Wholesale prices climb for grocers, caterers and market traders

• Bakeries, delis and butchers face higher ingredient costs

• Delivery firms get hit as suppliers pass on costs

Even florists have to pay more for imported flowers and feed, and with 80% of consumers already worried about grocery prices, customers will have less to spend in local shops and high‑street businesses.

This could well turn out to be a bigger problem than oil prices because of the long tail impact. There are very few alternatives to nitrogen fertiliser and if you miss out fertiliser for one growing season the lower yields mean longer term shortages pushing prices higher and squeezing households and small businesses.

The fertiliser crunch is the next big cost shock heading for the UK, and if the Strait of Hormuz stays blocked, food prices will surge again next year. As always big firms may be able to cope but the small and micro will be hardest hit.