Fertilizer Use Already Falling as War Drives Up Costs, Yara Says

A surge in fertilizer costs is already eroding demand for crop nutrients, risking dramatic consequences for countries that can’t afford to subsidize their farming industry, according to producer Yara International ASA.

Prices of Egyptian urea, a key fertilizer benchmark, have jumped about 80% since war broke out in the Middle East, snarling supplies from the major producing region. The rally has outpaced gains in crop prices, squeezing farmers’ margins and forcing them to make “difficult decisions,” Yara Chief Executive Officer Svein Tore Holsether said in an interview.

“Demand rationing is happening,” he said in London on Thursday. “In a ...