The shockwaves from the conflict in the Strait of Hormuz are spreading from energy markets to the global food supply chain. A triple pressure of fertilizer raw material shortages, shipping disruptions, and Russian export restrictions is leading to a new round of supply shocks for agricultural commodities, with Goldman Sachs anticipating that inflows into agricultural ETFs will set a new historical record this month.
Goldman Sachs analyst Jasmin Schneider recently stated, &#34;We expect March 2026 to be the strongest month for inflows into agricultural ETFs, surpassing the record set in March 2022 during the outbreak of the Russia-Ukraine conflict.&#34;
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Meanwhile, in a report released this week, Goldman Sachs commodity analysts Lina Thomas and Daan Struyven warned that the transit risks in the Strait of Hormuz could have a substantial impact on global agricultural prices, stating that &#34;disruptions to fertilizer supply could drive up food prices by suppressing grain production.&#34;
Alexandra Prokopenko, a former advisor to the Russian central bank, believes that food price shocks could manifest in global markets within six to nine months. Simon White, a macro strategist at Bloomberg, also pointed out that the energy and fertilizer supply shocks pose a hidden risk of &#34;second-round inflation effects.&#34;
<h2>Fertilizer Supply Chain Under Pressure, Grain Price Upside Risks Accumulate</h2>
The Strait of Hormuz is a critical corridor for global nitrogen fertilizer trade. A Goldman Sachs report highlights its central role in the global nitrogen fertilizer market, which accounts for 60% of total global fertilizer use and is particularly crucial for crops like corn and grains.
Current supply pressures are multifaceted. Firstly, despite some vessels resuming passage, shipping backlogs in the Gulf region continue to accumulate and may take weeks or even longer to clear. Secondly, the full recovery of Qatar's LNG export capacity, which suffered an attack by the Islamic Revolutionary Guard Corps' drones or missiles last week, could take years—and natural gas is a key raw material for nitrogen fertilizer production. Thirdly, according to Russia's state news agency TASS, citing the Ministry of Agriculture, Russia has suspended exports of ammonium nitrate from March 21 to April 21 to ensure fertilizer supply for the domestic spring plowing season.
Goldman Sachs analysts point out that fertilizer accounts for about 20% of grain production costs. Disruptions to fertilizer supply could suppress grain yields through two channels: delayed or insufficient application of nitrogen fertilizer leading to reduced yields, or farmers shifting to crop varieties with lower fertilizer requirements, thereby altering planting structures. The analysts also note that the U.S., due to the timing of the conflict just before the planting season, is currently relatively protected, while Europe, Australia, and countries in the Southern Hemisphere, with later crop calendars, face greater exposure. However, even if U.S. farmers are relatively insulated, the expectation of rising global grain prices will still be transmitted to the domestic U.S. market.
Furthermore, in a commodity report released on March 16, HSBC noted that another overlooked bottleneck—sulfur—is experiencing a &#34;super squeeze.&#34; Approximately 80% of sulfur is used to produce sulfuric acid, and about 60% of sulfuric acid goes to the fertilizer industry. The U.S. Geological Survey lists sulfur as &#34;one of the most important elements in industrial raw materials through its main derivative, sulfuric acid.&#34; HSBC's report indicates that before the Middle East conflict, sulfur prices had already risen significantly due to limited supply and strong demand. The direct supply disruptions caused by the conflict, combined with the shipping risks in Hormuz, have pushed sulfur prices to &#34;new record highs.&#34;
<h2>Agricultural ETF Inflows May Set Record, Market Eyes Trading Opportunities</h2>
Against the backdrop of escalating supply shock expectations, capital is accelerating into assets related to agricultural commodities. Goldman Sachs analyst Schneider stated that the market volatility triggered by the current conflict is highly consistent with the drastic fluctuations in oil, gas, and energy markets during the Russia-Ukraine conflict in February 2022, and predicts that agricultural ETF inflows will reach a new historical record within the next few trading days.
From a technical perspective, the Bloomberg Agricultural Sub-Index has significantly pulled back from its 2020-2022 rally to the 50% Fibonacci level, followed by nearly two years of consolidation. Analysts believe that this trend may signal that agricultural commodities are brewing a trend reversal as the energy shock evolves into a fertilizer supply crisis, potentially driving up food prices later this year by suppressing crop yields.
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The conflict in the Strait of Hormuz is escalating from an energy crisis into a global food crisis. With a triple threat of fertilizer raw material shortages, shipping disruptions, and Russian export restrictions, Goldman Sachs forecasts that inflows into U.S. agricultural ETFs will surpass the historical peak seen during the Russia-Ukraine conflict this month. A former advisor to the Russian central bank warns that the impact of food price shocks could sweep global markets within six to nine months

- The conflict in the Strait of Hormuz is impacting global food supply chains due to fertilizer shortages and shipping disruptions, with Goldman Sachs predicting record inflows into agricultural ETFs in March 2026.  
- Analysts warn that the risks in the Strait could significantly affect global agricultural prices, with potential food price increases stemming from reduced fertilizer supplies.  
- Current supply pressures from various sources threaten crop yields and may lead to higher food prices, affecting markets globally, including the U.S. despite its relative protections.

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Fertilizer Supply Disruptions Could Lead to Record Inflows in US Agricultural ETFs?