War sparks global scramble for fertilizers, exposes food security risks

Governments across the world are moving to secure supplies of fertilizers ahead of the Northern Hemisphere spring planting season, as the war in the Middle East disrupts commodity flows and heightens fears of a global food crisis.

Fertilizers underscore the close link between energy and food prices, as they are critical to sustaining harvests worldwide.

The Middle East is a vital supplier, rich in mineral reserves and in the natural gas needed to produce nutrients for staple crops such as corn, wheat and rice.

With the Strait of Hormuz effectively closed, shipments have been disrupted as Iran, the United States and Israel continue attacks on energy infrastructure.

Urea prices, in turn, have risen, and phosphate supplies are also at risk. Much of the world’s supply is tied to the Persian Gulf, and concern has spread across the main agricultural economies.

Major exporters China and Russia are restricting some sales of agricultural nutrients, while the United States is easing transport restrictions to facilitate domestic flows.

India, the largest buyer of urea, has been struggling to secure supply. Greece and France have expanded financial support for farmers and, in Africa, Ghana has implemented a free fertilizer program.

“Farmers should not bear the burden of any crisis,” Indian Prime Minister Narendra Modi said on Tuesday (March 24) in parliament, where he addressed the conflict in the Middle East and announced efforts to strengthen fertilizer reserves. “The government stands with the farmers.”

Higher fertilizer prices could drive up food costs just as agricultural inflation had begun to ease after years of shocks, from the pandemic to the war in Ukraine and extreme weather.

Though usually excluded from core inflation measures, they have challenged central banks. Bank of England Governor Andrew Bailey warned of fresh price pressures as policymakers held interest rates steady this month.

At the same time, countries are moving to protect farmers already hit by low crop prices, high input costs and tariffs imposed by U.S. President Donald Trump.

Competition for supplies is intensifying.

Earlier this month, the Trump administration suspended sanctions on Venezuelan fertilizers to “ease the impact on American farmers,” according to White House spokeswoman Anna Kelly.

Colombia’s state-run Ecopetrol is seeking access to that same supply and is considering a bid for Monómeros, a major plant on the Caribbean coast.

Farther south, Brazil is increasing purchases from Morocco and Gulf countries while also exploring a joint fertilizer and energy project with Bolivia, according to a senior Brazilian official. A law reducing taxes on chemical inputs used in fertilizer production was also recently signed, Brazil’s Ministry of Development, Industry, Trade and Services said in a statement.

“Everyone is hunting,” Randy Place, senior grain analyst at The Hightower Report, said.

The provided chart offers a comparative analysis of Brazil’s monthly fertilizer inbound flow since January 2023. These insights are powered by Datamar’s DataLiner market intelligence:

Fertilizer Imports | Jan 2023 – Jan 2026 | WTMT

Source: DataLiner (click here to request a demo)

In key respects, the war in the Middle East marks a more dangerous moment than Russia’s invasion of Ukraine in 2022, which disrupted supply chains, in part because a larger share of global nitrogen fertilizer trade is now at stake.

The region accounts for more than one-third of urea exports and nearly one-quarter of ammonia exports, another key agricultural input. About half of sulfur trade, used in the production of phosphate fertilizers, also moves mainly through the Strait of Hormuz.

The disruptions caused by Russia’s war in Ukraine exposed the risks of relying on imported nutrients.

Efforts launched four years ago to strengthen supply have gained renewed urgency in recent weeks.

Unlike 2022, when Russian products were largely rerouted, the closure of the Strait of Hormuz is far more restrictive. Shipments are being physically blocked at a critical maritime chokepoint.

India is facing particular pressure.

Fertilizer production is the country’s largest consumer of gas, and some factories have shut down because supplies of the fuel needed to produce nitrogen-based nutrients have declined.

To fill the gap, authorities are turning to China for cargoes. They have also approved at least one new type of fertilizer to shift toward less conventional alternatives.

In recent days, some urea producers have held daily meetings with farmers to curb excessive use, according to people familiar with the matter.

Sushil Kumar, a 42-year-old farmer in Haryana, is feeling the squeeze. He grows wheat and rice on about 20 acres of leased land but has been unable to find diammonium phosphate, a nutrient needed at planting. Local dealers have no stock.

“Fertilizer is never available when we need it,” Kumar said.

To get ahead of shortages, buyers are paying a premium.

Saudi Arabia and Morocco have sold cargoes to Latin America at elevated prices. Dangote Fertiliser, one of Africa’s largest suppliers, says demand has increased. Russia halted some fertilizer exports on Tuesday, but the Kremlin said last week it remains one of the few countries capable of meeting global demand.

“We are talking about an agricultural input that plays an important role in food security,” said Ticiana Alvares, technical director at Brazilian energy research firm INEEP.

“Those who fail to look after themselves and their national interests, who do not begin to look at regional supply chains instead of global ones, will go through very hard times.”

If the conflict drags into midyear, much of the world will lose out.

Major agricultural producers such as the United States, Brazil and India are already seeing margins squeezed, raising the threat of broader spillover into food prices.

Richer nations may be able to shield farmers with subsidies, but poorer countries face tighter budgets.

The risks are most severe in sub-Saharan Africa and parts of South Asia, where dependence on food imports is high and hunger is already a serious problem.

Nigeria, for example, has reported supply delays from Russia and China. Some West African nations are “extremely concerned” about protecting export crops such as cocoa and cotton, said Ashish Lakhotia, executive director for fertilizers and crop inputs at ETG.

Even Gulf producers are unable to fully capitalize on higher prices or soft-power advantages while the Strait of Hormuz remains closed, according to Nick Kraft, senior analyst at Eurasia Group, whose coverage includes agriculture.

If there is a winner, he said, it is China.

“As the world’s largest producer of urea, with large reserves and tight state control over exports, Beijing can protect its own agricultural system while forcing tighter conditions on everyone else,” he said. “That is exactly what it is doing now.”

In the United States, the Trump administration has tried to moderate price spikes. Agriculture Secretary Brooke Rollins said in an interview that officials are “looking at every available tool” to relieve pressure on farmers.

Last week, Washington waived a shipping law so foreign-flagged vessels could transport fuel, fertilizers and other products between U.S. ports.

The White House is set to host agricultural executives at an event on Friday (March 27), in part to highlight the president’s efforts to lower input costs.

Farm groups are also lobbying to remove duties on phosphate fertilizers from Morocco, which holds some of the world’s largest reserves.

Even with those measures, Sherman Newlin, a farmer in Illinois, said the United States is unlikely to tame prices quickly or significantly unless the conflict ends and the Strait of Hormuz reopens.

“Every time they say they are going to make an announcement, it means nothing,” he said. “There is not much they can do.”

David Delaney, chief executive of phosphate producer Itafos, said he does not remember a more difficult period in his four decades in the industry.

After the war began, the United Nations warned of record hunger levels this year. If the conflict continues for several more months, tens of millions of people could face severe food insecurity.

“The world is used to big crops every year and to yields and harvests getting where they are needed,” he said. “I do not want to sound too alarmist yet, but this could be catastrophic if it lasts too long.”

Adapted from a report by Pratik Parija – Ilena Peng – Eleanor Thornber for Bloomberg Linea

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