Fertilizer shortages and high prices could collapse the fragile system that feeds the world
Dock workers unload fertilizer from a cargo ship at the port of Lianyungang, China, February 27, 2024 © Getty Images; CFOTO / Future Publishing
The
US-Israeli war on Iran has shut fertilizer plants throughout the Gulf
and choked off shipping routes. The longer it drags on, the greater the
risk of a global food crisis.
For farmers in the northern
hemisphere, the war has come at the worst possible time. The spring
planting season has begun, and fertilizer is in high demand. While
rising fuel costs are the most obvious consequence of the war to
consumers, the price of fertilizer is also increasing, and supply of its
ingredients is tightening.
How is the war affecting fertilizer supplies?
The
ongoing conflict affects every step of the fertilizer production chain.
To understand how, it’s vital to first understand how modern fertilizer
is made. In the most common process, natural gas is mixed with nitrogen
to produce ammonia, which is then refined into urea, ammonium nitrate,
and urea ammonium nitrate (UAN), all of which are considered nitrogen
fertilizers.
Ammonium nitrate LAR nitrogen fertilizer bags seen at a farm in Suffolk, UK © Getty Images
While farmers also
use phosphorus and potassium-based fertilizers, nitrogen fertilizers are
the most common, accounting for 59% of global consumption. Without
these fertilizers, roughly half of the world’s food supply would be
wiped out.
With its abundant supplies of natural gas, the Gulf
region is a key location for ammonia production. Global fertilizer
production is dominated by China, the US, India, and Russia, but Iran,
Saudi Arabia, and Qatar are the ninth, tenth, and eleventh-largest
producers, and around a third of the world’s nitrogen fertilizers pass
through the Strait of Hormuz.
The strait has been de facto closed
since early March, with four ships transiting the waterway on March 7,
down from an average of 129 throughout February, according to UN
figures.
As
such, these fertilizers cannot reach global markets, and prices have
soared accordingly. Urea is currently trading at $594 per ton, up from
$464 on February 27, the day before the war began. Nitrogen fertilizers
such as urea are not the only agricultural product experiencing a
similar price spike. Spot prices for sulfur – a fossil fuel byproduct
which boosts crop yields and hardens plants against diseases – have
risen more than 20% on Chinese markets in the same timeframe. The
situation is being exacerbated by rising marine fuel and insurance
costs.
In addition to producing fertilizer, the Gulf states export
gas used in ammonia plants abroad. Indian urea manufacturers have
already cut output and are reportedly discussing facility closures,
after Qatar halted all liquefied natural gas (LNG) production, instantly
taking 20% of the world’s LNG exports off the market.
What’s at stake?
Higher
input costs translate to higher prices for consumers. Supply chain
disruptions during the Covid-19 pandemic and a previous spike in
fertilizer costs after the Ukraine conflict escalated in 2022 have left
food prices across most of Europe a third higher than they were in 2019,
according to the European Central Bank.
With the EU foregoing
Russian gas in favor of American and Qatari LNG, the bloc’s fertilizer
manufacturers are also winding down production. Poland’s state-run
fertilizer producer, Grupa Azoty SA, temporarily stopped accepting new
orders in early March, after European gas prices rose by 50%. The
company reopened its order books several days later at market rates.
![Image Text](https://mf.b37mrtl.ru/files/2026.03/original/69b4605b85f540456f2eb737.jpg" data-sizes="auto" data-src="https://mf.b37mrtl.ru/files/2026.03/original/69b4605b85f540456f2eb737.jpg)
A fertilizer plant on the coast at the edge of the desert in Umm Sai, Qatar © Getty Images; Bernard Gerard
It
is the world’s poorest countries, however, that stand to suffer most.
In a report published on Tuesday, UN Trade and Development warned that
Sudan, Sri Lanka, Tanzania, Somalia, Kenya, and Mozambique are six of
the ten nations most dependent on fertilizers from the Persian Gulf
region. Gulf states supply 54% of fertilizer used by Sudan and 36% used
by Sri Lanka.
Farmers in developing countries are often unable to
cope with increased input costs, and food shortages can rapidly become
famines.
Is anyone benefiting from fertilizer shortages?
As
is the case with oil and gas, high prices benefit those able to produce
fertilizer and bring it to market. Russia is one such nation, and
together with Belarus accounts for 20% of the world’s total fertilizer
exports. According to government statistics, fertilizer production in
Russia increased by 3.5% in 2025, reaching a record 65.4 million tons.
Nevertheless, as costs soar across the EU, Brussels has tariffed Russian and Belarusian fertilizers, with the aim of “weakening Russia’s war economy.”
In
some respects, the EU’s loss has been Russia’s gain. Russia has
redirected its exports to BRICS nations, increasing fertilizer shipments
to these countries by 60% between 2021 and 2024. With an abundance of
cheap fertilizer also going to Russian farmers, a new billionaire class
is emerging in the country.
Of the 14 new dollar billionaires
Russia added last year, seven made their fortunes in agriculture and
food production, according to the 2026 Forbes World’s Billionaires List.
These food tycoons include Aleksandr Tkachev, co-founder of
Agrocomplex, one of Russia’s largest food and agriculture producers, and
Vadim Moshkovich, who controls Rusagro, one of Russia’s largest pork
and sugar producers.
Billionaires Andrey Melnychenko and Dmitry
Mazepin remain mainstays on the list, and have increased their wealth
due to European demand for their companies’ fertilizers.
Does the US have a plan to resolve the crisis?
The Strait of Hormuz will remain closed as long as the US and Iran
are at war. According to the White House, this may be another two
months. US President Donald Trump has given no clear victory conditions,
alternating between describing the war as “very complete” on Monday, and threatening to rain “death, fire, and fury” upon Iran the following day, if Tehran impedes maritime traffic through the strait.
However,
the strait will be as good as impassable as long as insurers refuse to
cover shipping moving through it, and energy production in the Gulf will
remain suspended as long as Iran keeps launching retaliatory strikes
against American bases in the region.
Trump has discussed, but not
committed to, using the US Navy to escort ships through the strait. At
the same time, his officials have reassured the public that the crisis
will somehow resolve itself. “The plan is to get oil and natural gas and fertilizer, and all of the products from the Gulf flowing through the straits,” US Energy Secretary Chris Wright told Fox News last week. “One large tanker has already gone through the straits with no issues at all.” As it turned out, the tanker Wright was referring to was Iranian.
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