The Strait of Hormuz has been a critical point for the global economy for decades. Nearly daily, tankers carrying oil and liquefied gas pass through the narrow strait between Iran and Oman. Less known, however, is its central importance to global agriculture. Since the Iranian blockade following the escalating Middle East war, it is not only energy markets that are under pressure, but also the supply of fertilizers – with potentially dramatic consequences for billions of people.
International organizations are now warning of a development that could go far beyond rising agricultural prices. Modern agriculture is highly dependent on nitrogen, phosphate, and potash fertilizers. If a significant part of these supply chains fails, there is a risk of declining yields in staple foods such as rice, wheat, or corn – especially in already fragile regions of Africa and Asia.
The Gulf as the Center of the Global Fertilizer Industry
The countries of the Persian Gulf are among the world’s most important producers of nitrogen-based fertilizers. Qatar, Saudi Arabia, the United Arab Emirates, and Iran have large natural gas reserves, which serve as a central basis for the production of ammonia and urea. Urea, in particular, is the most widely used nitrogen fertilizer globally.
Estimates indicate that around one-third of the global maritime fertilizer trade originates from the region. The share is particularly significant for urea exports, ranging between 30 and 35 percent. The Gulf also plays a key role in the ammonia trade.
With the months-long blockade of the Strait of Hormuz, this infrastructure is now being massively disrupted. Numerous cargo ships are stuck or avoid the region for security reasons. At the same time, production facilities have been damaged by airstrikes. The Qatari industrial complex Ras Laffan is considered especially hard hit.
Several regional countries have reduced or temporarily halted their production. This not only results in a loss of export capacity but also means that precursor products for other fertilizer manufacturers are missing from the global market.
Why Fertilizers Lack Strategic Reserves
Unlike oil, there are hardly any coordinated international emergency reserves for fertilizers. Global agriculture operates within narrow time windows: sowing and fertilizing cycles can only be delayed to a limited extent. If fertilizer arrives late, yields often decline irreversibly.
Additionally, production is energy-intensive. Natural gas serves not only as an energy source but also as a chemical raw material in ammonia synthesis. Rising gas prices therefore directly affect the entire supply chain.
The situation partly resembles the food crises of 2007/08 and the disruptions following the Russian attack on Ukraine in 2022. Even then, fertilizer prices rose dramatically within a few months. Many developing countries had to expand subsidies or reduce their imports.
Today’s situation is even more precarious in some regions. Many states have high national debt, weak currencies, and limited fiscal room. At the same time, populations continue to grow strongly.
Africa Particularly Vulnerable
The crisis could hit numerous African countries the hardest. Many nations south of the Sahara import a significant share of their fertilizers from the Gulf states. Particularly affected are Sudan, Tanzania, Somalia, Kenya, and Mozambique.
The structural problem lies in the organization of agriculture itself. Large parts of African farming are based on smallholder farms with minimal reserves. Rising input costs can hardly be absorbed there.
Even moderate price increases cause farmers to use less fertilizer. In the short term, this lowers production costs, but in the long term, yields often decrease significantly. Especially maize and grain cultivation respond sensitively to nitrogen under-supply.
The situation is particularly delicate in countries like Malawi. There, agriculture depends almost entirely on imported fertilizers. At the same time, agriculture represents the most important economic sector and the basis of food security.
Therefore, the United Nations warn of a possible expansion of hunger crises. Millions of additional people could fall into acute food insecurity.
Asia’s Risk: High Population Density and Intensive Agriculture
The situation is even more complex in Asia. Countries like India, Pakistan, Bangladesh, and Sri Lanka rank among the largest consumers of fertilizers worldwide. Agriculture there is highly intensive and depends on regular nitrogen applications.
Rice production, in particular, requires substantial amounts of urea. Delays or price increases therefore directly affect yields and food prices.
India has been trying for decades to guarantee stable prices for farmers through billion-dollar subsidy programs. However, even New Delhi is now hitting fiscal limits. Narendra Modi’s government is therefore increasingly promoting more efficient fertilizer use and alternative cultivation methods.
Pakistan, in turn, is additionally suffering from energy shortages. Several fertilizer plants there had to scale back production due to limited gas supplies.
For densely populated Asian countries, the danger is particularly great because rice, wheat, and corn form the central basis of nutrition. Even small production declines can generate significant social and political tensions.
Brazil and the Global Agricultural Markets
Latin America is also not spared from the crisis. Brazil, one of the most important exporters of soy, sugar, and corn, imports about one-fifth of its fertilizers from the Gulf region.
Brazil’s significance extends well beyond its own supply. The country is among the central suppliers of animal feed and agricultural raw materials worldwide. Declining Brazilian harvests would therefore further amplify global price increases.
International fertilizer prices are already rising significantly. Experts expect price levels in the current half-year to be 15 to 20 percent above the previous year’s level. Added to this are rising transportation and energy costs.
The market dynamics are particularly problematic: many importers initially postponed orders in the hope of relief. Now that panic buying may occur, further price surges are threatened.
More Than Just a Fertilizer Crisis
The current development shows how closely energy, security, and food policy are intertwined. Agriculture depends not only on fertilizers but also on functioning transport routes, fuel supply, and stable raw material markets.
There is also an additional uncertainty: meteorologists are watching with concern the possible return of a strong El Niño phenomenon toward the end of the year. In previous years, El Niño led to droughts, crop failures, and extreme weather conditions in numerous agricultural regions.
When climatic stresses and geopolitical crises coincide, chain reactions with global effects emerge. Especially fragile states have hardly any means to cushion such shocks.
Even if the blockade of the Strait of Hormuz were lifted in the short term, the consequences would still be felt for months. Production outages cannot be immediately compensated. Furthermore, there is a global shortage of transportation capacity to quickly handle backlogged deliveries.
The current crisis thus highlights a structural weakness of globalized agriculture: the feeding of billions of people depends on a few geopolitical bottlenecks. If one of these is destabilized, entire supply systems falter.