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11:31 30.03.2026 •
The war in the Gulf has hit the epicentre of global fertiliser production. It has shut off the supply of urea, ammonia and sulphur for 27 critical days in the agricultural calendar, ‘The Telegraph’ reports.
China, Russia and Turkey have now greatly compounded the shortage by imposing their own curbs on fertiliser exports in recent days. Close to 45pc of globally traded nitrogen is cut off, disrupted or at risk.
The crunch is happening just as the big farming belts of the northern hemisphere near the spring planting season and just as Australia approaches winter planting. It is the blackest of black swans.
Abdolreza Abbassian, the former head of commodities at the United Nations’ Food and Agriculture Organization, said the markets did not yet seem to grasp the full gravity of what was already in the pipeline.
“It will be bad enough even if the Strait of Hormuz is reopened tomorrow but if the war goes on for another month or more, it is going to be a really horrifying crisis unlike anything any of us have ever seen before,” he said.
A second crisis is building up in parallel. The two risk colliding in 2027. Atmospheric scientists expect an El Niño pattern in the South Pacific this year and next, leading to hotter weather, longer droughts and lower crop yields.
A greater immediate threat
Jean-Marie Paugam, from the World Trade Organization, said the fertiliser shock is a greater immediate threat than the oil and gas shock.
“It is the number one alert today. All the main cereals are vulnerable but so is animal feed and the effect is going to keep accumulating through next year. There are countries where people will die of hunger if they don’t get their imports,” he said.
It is costly to store fertilisers and most states work on a just-in-time basis. Global stocks are thin. Half the total inventory is in China, the one country prepared for famines.
There is no equivalent to the International Energy Agency. No global body is able to coordinate the release of deep reserves in an emergency. It is sauve qui peut in the world of fertilisers.
A third of global urea exports and half of sulphur exports come from Qatar and the Gulf. Some supplies are getting through from Iran but most remain locked up.
Global urea prices have risen 60pc to $680
China is the world’s biggest producer of fertilisers by far, accounting for 15pc of global urea exports and 30pc of phosphate fertilisers. It tightened export curbs on most of its output last week, hitting the market at the worst possible moment.
Russia is the second largest. It followed suit this week, imposing a one-month ban (for now) on shipments of ammonium nitrate in order to meet “the needs of the domestic market during the spring field work period”.
Turkey has joined the stampede, even blocking the transport of urea.
These export curbs are perhaps understandable. Fertiliser prices have gone mad. The three countries fear food inflation just like the rest of us. But hoarding on this scale, at this moment, has a geopolitical sting in the tail.
Global urea prices have risen 60pc to $680 (£510) a tonne on the quoted world market since mid-February but that is only if you can get it.
The internal production has collapsed
Energy experts Argus report that Australian farmers have been paying as much as $900, four times the pre-pandemic level.
Aussies face a double shock because the country has shut down most of its refineries and is now acutely short of diesel, sending tractor fuel costs through the roof.
American farmers were in a structural depression before this crisis because of spiralling input costs. They now face a 70pc jump in diesel prices. The fuel tracks the global market regardless of Donald Trump’s “energy supremacy”.
Their internal production has collapsed because natural gas shortages have doubled the cost of feedstock. The combined effect is depriving Pakistan, India and Bangladesh of two million tonnes of urea each week.
The Kharif monsoon planting season kicks off in June, but that means the supply chains must be repaired by mid-April.
“I don’t want to sound the alarm too much yet but this could be catastrophic if it lasts long,” said David Delaney, the head of the US fertiliser group Itafos, speaking to Bloomberg.
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