In the wake of escalating conflict in the Middle East, the global fertilizer market has been severely impacted, leading to significant price increases and disruptions in supply chains. The ongoing U.S.-Israeli conflict with Iran has drastically reduced shipping traffic through the strategically critical Strait of Hormuz, where approximately one-third of all fertilizer is transported worldwide. Concerns are mounting regarding the potential impact on food production, particularly in regions heavily reliant on imported fertilizers and agricultural supplies.
### Rising Fertilizer Prices
Data indicates that fertilizer prices have surged by as much as 30% in certain areas, prompting alarm among agricultural experts and farmers alike. Noah Gordon, a fellow at the Carnegie Endowment for International Peace, stated, “Fertilizer prices are way up. They’re up around 30 percent more in some parts of the world, and that’s significant.” Countries in the Gulf region, such as Saudi Arabia, the UAE, Kuwait, and Iran, are major exporters of key ingredients for fertilizer production, including natural gas and various minerals.
The conflict has not only halted shipments from these countries, but it has also disrupted the supply of raw materials needed for fertilizer production elsewhere. Gordon notes that some countries that depend on Gulf supplies, like Pakistan, India, and Brazil, have had to halt fertilizer production due to rising costs and limited availability. In India, plants in regions like Punjab and Haryana are feeling the pinch, with fears that impending planting seasons may not yield adequate fertilizer supplies.
### Global Food Security at Risk
The disruption in fertilizer production is raising alarms for global food security. Historically, countries have managed to pivot their sources of fertilizer during crises—like in 2022, after Russia’s invasion of Ukraine. However, experts like Máximo Torero, chief economist at the United Nations Food and Agriculture Organization, argue that this situation is different. “The loss of Gulf exports creates an immediate global shortfall with no quick substitutes,” he explained, noting that there are no international reserves for fertilizers akin to the strategic oil stockpiles that exist.
Regions most immediately affected include South Asia—specifically Bangladesh, India, Pakistan, and Sri Lanka—as well as parts of East Africa, such as Sudan, Kenya, and Somalia. Field operations in these regions rely heavily on fertilizers for crop production, and delays in the planting seasons will exacerbate food scarcity. In countries like India, nervousness is palpable among farmers as they await clarity on supply and costs for the June planting season. Avinash Kishore, a researcher with the International Food Policy Research Institute, expressed concerns about the lingering effects of the ongoing war, stating, “Preparation for fertilizers and other inputs needs to begin already. There is a little bit of nervousness about what if the war continues for too long.”
As oil prices rise due to the closure of the Strait of Hormuz, the costs associated with agricultural machinery, transport, and production are increasing as well. With essential commodities requiring oil for their production and transport, the potential for higher food prices looms large. Torero underscores the urgency of the situation by stating, “What may come to pass is less food in the markets, and as a result of that, the prices of food in the world will increase.”
Countries like India, which exports considerable quantities of food, including rice and various fruits, are also experiencing disruptions in their trading markets. These exports are crucial not only for the nation’s economy but also for food security in many Middle Eastern countries.
Though there is hope that the Strait of Hormuz may soon reopen for international shipping, which could alleviate some pressures, experts caution that the situation remains fluid. “If shipping resumes quickly, the disruption could be short-lived,” says Torero, suggesting that markets could stabilize and prices might level out sooner rather than later. However, until then, millions of households globally are poised to face the brunt of higher food prices in what could be another tumultuous chapter for food security worldwide.
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