Iran War Sends Fertiliser Prices Surging: 4 ASX Agriculture Stocks Investors Need to Watch

ASX Agriculture Stocks are in focus as fertiliser prices surge

Most investors watching the Iran war have focused on oil and defence. The bigger story for ASX agriculture investors is fertiliser. Since the US and Israel launched strikes on Iran on 28 February 2026, the Strait of Hormuz has been effectively shut to commercial shipping, halting the flow of urea and ammonia that Australian farmers depend on. Australian urea prices have already surged 60% to A$1,350 per tonne this week, according to Reuters, and with April being the critical sowing window for wheat and canola, farmers are making irreversible planting decisions right now based on those elevated costs. The earnings impact for ASX agriculture stocks is already dividing clear winners from those facing real margin pressure.

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Why the Iran War Is a Fertiliser Story

The Strait of Hormuz is not just an oil story. According to the United Nations, around one-third of all global seaborne fertiliser trade passes through this waterway. When Iran effectively closed it in early March 2026, Middle East urea prices jumped more than 19% in a single week to over US$590 per metric tonne, according to the International Food Policy Research Institute. Bank of America has warned that the conflict threatens 65% to 70% of global urea supplies, with prices already up 30% to 40% from pre-war levels.

Natural gas, the primary feedstock for nitrogen fertiliser production, is also under pressure. Qatar’s state energy firm QatarEnergy halted output at the world’s largest urea plant after its LNG facilities were attacked, and European gas benchmarks rose more than 50% above pre-conflict levels within days. Fertiliser price spikes of this nature typically take months to unwind. We believe the earnings impact will flow through well into FY27 for companies without domestic supply advantages or strong pricing power.

Who Wins and Who Loses Among ASX Agriculture Stocks

Ridley Corporation (ASX: RIC) is the clearest winner in this environment. After completing its A$433.7 million acquisition of the Incitec Pivot Fertilisers distribution business in September 2025, Ridley now controls around 46% of the eastern Australian fertiliser market, distributing approximately 2.2 million tonnes annually. As a domestically based distributor, Ridley is better placed than importers to capture a scarcity premium when global urea prices surge. In our view, it is the contrarian beneficiary that most ASX investors are currently overlooking.

GrainCorp (ASX: GNC) offers more balanced exposure. As a grain handler and processor, GrainCorp benefits directly from elevated commodity prices flowing through its storage and logistics network. Crucially, Rabobank’s April 2026 agribusiness report confirms that canola prices have strengthened on the back of the Middle East conflict, supported by firm energy markets and strong crush margins, which adds a direct earnings tailwind for GrainCorp’s processing operations.

Elders (ASX: ELD), as a rural services and inputs distributor, has some ability to pass higher fertiliser costs through to farmers. However, Commonwealth Bank of Australia analyst Dennis Voznesenski confirmed this week that farmers are actively switching from nitrogen-hungry crops like wheat and canola to feed barley to manage costs. That crop shift could weigh on Elders’ input volumes this season.

Nufarm (ASX: NUF) faces the most direct margin risk. Its crop protection chemical production relies on energy and chemical feedstocks disrupted by the Strait of Hormuz closure. Investors should watch its next quarterly update carefully for early signs of margin compression.

The Investor’s Takeaway for ASX Agriculture Stocks

Input cost inflation from the Iran war is real, but the impact across ASX agriculture stocks is uneven, and that gap creates opportunity. The key risk is clear: watch for any diplomatic breakthrough involving the Iran-Oman protocol currently being drafted, which could reopen the strait to broader commercial traffic and quickly normalise fertiliser prices. Three Omani-managed ships did transit the strait on 2 April using the conventional shipping lane, the first movement of this kind since the war began, and markets reacted. Any sustained reopening would weaken the thesis rapidly.

We believe Ridley Corporation is the most compelling opportunity here for investors willing to look past the obvious oil and defence plays. For broader agricultural exposure without direct input cost risk, GrainCorp remains the sensible alternative.