About a third of all fertilizer shipped globally passes through the Strait of Hormuz, the narrow channel between the Persian Gulf and the Gulf of Oman. Shipping has been reduced to a trickle because of the U.S.-Israeli war with Iran, and prices for oil, natural gas and fertilizer have been rising.
“Fertilizer prices are way up. They’re up around 30 percent more in some parts of the world, and that’s significant,” says Noah Gordon, a fellow at the Carnegie Endowment for International Peace.
Gulf countries such as Saudi Arabia, the United Arab Emirates, Kuwait and Iran are major producers of fertilizer and of the raw inputs other countries use to make fertilizer, notably natural gas and minerals. Disruptions to those supplies are already forcing some plants in India, Bangladesh and Pakistan to halt fertilizer production as energy and feedstock costs spike.
Global fertilizer production was disrupted in 2022 after Russia invaded Ukraine; then, some countries compensated by increasing imports from the Middle East. That option is not available now, says Máximo Torero, chief economist for the U.N. Food and Agriculture Organization. “The loss of Gulf exports creates an immediate global shortfall with no quick substitutes,” he says. He also notes there are no strategic international fertilizer stockpiles like there are for oil.
Torero lists countries likely to be hit first: in South Asia, Bangladesh, India, Pakistan and Sri Lanka; in East Africa, Sudan, Kenya and Somalia; and in the Middle East, Turkey and Jordan. How quickly each country feels the impact depends on local planting seasons.
In India, farmers worry about both higher prices and shortages ahead of the June planting season, says Avinash Kishore of the International Food Policy Research Institute in New Delhi. “The 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. What will happen to the next season?” he says.
Higher oil prices from a near-closure of the Strait of Hormuz add further pressure. Farming depends on fuel for tractors and machinery, and transporting crops to markets requires fuel, Torero says. Lower supply in markets would likely push food prices higher globally.
Rice illustrates the stakes: it is central to diets and economies across South Asia, where many households spend a large share of income on food. Small increases in food prices have outsized effects on poor families. Kishore warns that a five to ten percent rise in prices could be disastrous for hundreds of millions of families and increase child malnutrition.
Export markets are also strained. Major food producers such as India ship rice varieties like basmati and fruits like mangoes and grapes to Gulf countries. Disruptions in shipping and trade ties mean those exports are declining, which could further affect producers’ incomes and price expectations.
If the Strait of Hormuz reopens for international shipping soon, Torero says markets could recover quickly and the disruption would be short-lived. But if the closure persists, the combination of fertilizer shortages, higher energy costs and reduced exports risks less food in markets and higher global food prices, with severe consequences for vulnerable populations.
