While much attention on the impact of the war on Iran has focused on energy supplies, most notably crude oil and natural gas, the impact of the war on fertilizer supplies, and therefore, agricultural production worldwide, has been less appreciated. With the window of the ongoing planting season in most countries in the northern hemisphere rapidly approaching a close, the situation is dire, particularly since no resolution to the conflict appears in sight.

Although the ongoing crisis has drawn comparisons to the severe shortage of fertilizers following the war in Ukraine in 2022, the current situation appears to be far more severe for at least five reasons. This is despite the fact that natural gas prices have been far more benign in the current scenario than in 2022.

First, the most obvious reason is the closure of the Strait of Hormuz, which has physically blocked supplies from the Persian Gulf region. About one-fourth of the global seaborne trade in ammonia, about 40 per cent of the trade in urea, and about 44 per cent of the trade in sulphur, a critical raw material in the production of phosphatic fertilizers, normally passes through the Strait of Hormuz. With the Strait effectively closed since February 28, supplies of two of the three main types of fertilizers – nitrogen (N), phosphorus (P), and potassium (K) – that are often combined in NPK fertilizer products are affected. Only potassium-based fertilizers have escaped the crisis.

Second, the war has – directly and indirectly – impaired fertilizer production capacities in the region. While natural gas facilities in Saudi Arabia, Qatar, and Bahrain have all suffered damage in the war, the fact that highly toxic ammonia cannot be stored safely for prolonged periods has meant that even facilities that have not been damaged have been operating at far lower capacities. Over time, the countries in the Gulf region have built significant fertilizer production capacities by utilising natural gas, the most important ingredient for producing ammonia, and the basic building block of all nitrogenous fertilizers. Collectively, exports of urea from Iran, Oman, Saudi Arabia, Qatar, the United Arab Emirates, and Bahrain account for more than one-third of global exports.

The price of natural gas, which accounts for 80 to 90 per cent of the cost of ammonia, the primary feedstock for urea, has been relatively stable during the current conflict, unlike in 2022. If the conflict prolongs, this may cause urea prices to rise even further. The World Bank noted in a recent report that a prolonged conflict in West Asia threatens to push average urea prices in 2026 above the 2022 average of USD 700 per tonne, the second highest in real terms since 1974.

Third, the war has affected the evacuation of petroleum and natural gas from refineries in the region. Refineries have therefore had to operate at lower capacities, which has affected the production of intermediate products like sulphur that are critical for fertilizer production. “Sour” grade crude oil from the region, which is characterised by relatively high sulphur content, readily provides sulphur as a byproduct at the refineries in the region, which are now operating far below their capacity. Sulphur is critical for the production of sulphuric acid, which is essential for the conversion of rock phosphate into diammonium phosphate (DAP) and monoammonium phosphate (MAP), two essential phosphatic fertilizers. Given that about half of all sulphur traded globally passes through the Strait of Hormuz, this has affected production in Morocco, the biggest exporter of phosphate, and China, which is also a leading exporter of phosphatic fertilizers.

Fourth, since fertilizer availability has implications for food security, exporting countries have adopted a defensive posture that aims to protect their own cultivators from the vagaries of the world market. Both Russia and China have set barriers to exports, the former on ammonia-based fertilizers and the latter on phosphatic fertilizers and sulphuric acid, further constraining availability in global markets. It is significant that a small number of countries dominate the production of phosphatic and potassium fertilizers: Canada, Belarus, and Russia of potash and Morocco, Saudi Arabia, and China of phosphates. The production of urea is more dispersed, even if it generally tends to cluster around natural gas facilities. China’s reliance on coal, rather than natural gas, for the production of ammonia/urea has provided it some protection in the current crisis.

Since 2021, China has regulated exports of urea as well as phosphatic fertilizers – in both cases, China is a significant producer – in order to safeguard its agricultural needs. In fact, even before the closure of the Strait of Hormuz, in December 2025, China had halted exports of phosphatic fertilizers. After the US-Israel attack on Iran, in March, China extended the ban to nitrogen-potassium fertilizers, leaving just a few speciality blends free for export.

This is a new development in global fertilizer markets because China would have normally been regarded as the fallback option in the event of a disruption of supplies from the Gulf. The case of phosphatic fertilizers is interesting because all three major sources – Morocco, Saudi Arabia, and China – have withdrawn from the market, albeit for different reasons. Morocco has withdrawn because supplies of ammonia and sulphur are not available, Saudi Arabia because its access to the Strait of Hormuz is blocked, and China because it chooses to prioritise food security concerns over profit from trade.

The fifth reason why the ongoing fertilizer crisis is different from the crisis of 2022 is that, unlike in 2022, when grain prices also increased significantly because Ukraine and Russia accounted for about one-third of global wheat exports, prices are now flat. This implies that growers’ margins are likely to be under pressure; while input costs soar, output prices are threatened by a relative glut in global markets. The World Bank’s “Commodity Markets Outlook” report for April observed that “markedly high urea prices have pushed the ratio of urea to food prices, a rough measure of fertilizer affordability, to levels not seen since mid-2022, implying tighter margins for farmers.”

Most importantly, the fertilizer shock follows the burden already imposed by rising fuel costs. The asymmetry between input and output prices thus has obvious humanitarian consequences, especially for those operating smallholdings in the Global South.

In April, the average price of urea, the world’s most widely used fertilizer, was about USD 857 a tonne, the highest monthly level since April 2022. Urea prices have doubled between January and April 2026. Prices of DAP have also risen, although not as spectacularly as urea prices; DAP prices (USD 725 per tonne in April) have increased by a more modest 17 per cent since January 2026, but prices were already at elevated levels in late 2025, at their highest since the Ukraine conflict. Although the average price of muriate of potassium (MOP), the other critical fertilizer, increased by about 10 per cent during this period, the price is at its highest level in two years.

The immediate impact of the fall in fertilizer availability and the consequent price increase – reflected in the unfavourable input cost-output price ratio – would be on fertilizer use. This would not only affect yields but also incomes of farmers. The countries most vulnerable are those in Africa, especially those in the sub-Saharan region. The consumption of fertilizers in Africa, already abysmally low, is likely to remain stagnant because of limited supplies and high prices. (The consumption of fertilizers in Africa is less than 18 kg per hectare, compared to about 400 kg per hectare in China, about 150 kg per hectare in India, and a global average of about 60 kg per hectare.)

South Asia is also heavily dependent on imports of fertilizers. Urea production facilities have been either shut or under reduced operation because of the limited supply of natural gas in India, Pakistan, Bangladesh, and Sri Lanka. Although India has considerable capacity for urea production, it still imports about 20 to 25 per cent of its needs, mainly from Oman and Saudi Arabia. India’s dependence on imports for phosphatic fertilizers is significantly greater; it imports nearly half of its needs from two main sources, Saudi Arabia and Morocco. The Indian government has claimed that it has adequate quantities of fertilizers to meet the needs of the kharif crop for which sowing starts in June.

Major rice producing countries in Southeast Asia, such as Indonesia, Thailand, and Vietnam, have already shut their urea production facilities because of the non-availability of basic feedstock. Their plight is compounded by the simultaneous disruption of nitrogenous as well as phosphatic fertilizer supplies from West Asia as well as China.

Although Brazil’s planting season for its most important crop, soyabean, only starts in late September, there are early signs that the next crop could be under threat. Brazil is a significant importer of fertilizers, in fact, the single biggest importer of fertilizers. In 2025, it imported 46 million tonnes and is dependent on imports for 85 per cent of its needs. Soyabean growers in Brazil have just harvested the 2025–26 crop and normally prepare for the next planting season at this time of the year. Early reports indicate that Brazil’s urea imports have dropped by one-third compared to the same period last year. A resulting drop in yields would have severe consequences for not only the country, its economy and livelihoods but also for global livestock feed chains that depend on Brazilian soyabeans. Brazil’s soyabean output has more than tripled in the last two decades – from about 52 million tonnes in 2002–03 to about 180 million tonnes in 2025–26. The country now accounts for about 60 per cent of the global trade in soyabeans.

The only redeeming feature of the current crisis is that natural gas prices have not spiked as steeply as crude oil prices. However, if the crisis in West Asia prolongs further and extends close to winter when the demand for natural gas in Europe for power generation and heating starts to peak, prices may no longer remain as benign. If the conflict drags on, fertilizer supplies could be threatened further, resulting in a more general global food and livelihood crisis.