Fertilizer Transportation Disruptions Drive Grain Prices Higher, CSI Agriculture Thematic Index Rises Over 1% Intraday

On March 12, 2026, the agriculture sector defied the trend and strengthened. As of 14:33, the CSI Agriculture Theme Index (000949) surged by 1.41%. Leading stocks included Yituo Co., Ltd., which hit the daily limit, Hainan Rubber rose by 7.61%, Morning Light Biological increased by 7.13%, and stocks like Yasheng Group and Lier Chemical also gained.

In terms of news, ongoing conflicts in the Middle East are affecting fertilizer transportation, which in turn impacts the international fertilizer market. The Middle East is one of the main global producers of fertilizer, with about one-third of the world’s fertilizer supply transported through the Strait of Hormuz. Iran is also a major exporter of nitrogen and phosphate fertilizers. The latest conflicts are rapidly disrupting the global fertilizer material market. As of last week, U.S. urea prices had risen to $550 per ton, up $70 from the previous week.

Currently, global food supply is experiencing a temporary shock, with food prices showing a significant positive correlation with oil prices. Rising oil prices increase the costs of fertilizers and agricultural machinery, directly driving up food prices. If the Strait of Hormuz remains blocked, it could cut off one-third of global urea exports and severely impact food production. The global food inventory-to-consumption ratio has fallen to a low of 23.8%, making supply chains more fragile, and food prices may face substantial increases.

Guoxin Securities pointed out that China’s dependence on potassium fertilizer imports remains high at 70%. In 2025, potassium chloride production is expected to decrease by 6% year-on-year. Meanwhile, Brazil’s spring procurement has driven global potassium chloride imports to a record high, supporting stable or rising international prices. At the same time, domestic attention to food security has increased, and the target for potassium fertilizer safety stock is expected to be raised from about 2.87 million tons to over 4 million tons. The medium- to long-term supply and demand balance is likely to continue.

Tianhong CSI Agriculture Theme ETF Connect Fund (A: 010769; C: 010770) was established on January 22, 2021. It invests in the Tianhong Agriculture ETF (512620), closely tracking the underlying index, with the goal of minimizing tracking deviation and tracking error.

Interested investors can follow Tianhong CSI Agriculture Theme ETF Connect Fund (A: 010769; C: 010770) by searching for Tianhong Agriculture on Alipay, Tiantian Fund, or JD Finance.

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