Energy shock triggers fertilizer shortage, pushing urea prices up and raising fears of global crop yield decline
Developing countries at highest risk as input costs surge and farmers cut fertilizer use
The ongoing Iran-US-Israel conflict has triggered a global fertilizer crisis, rapidly emerging as a critical threat to agriculture, food production, and commodity markets worldwide.
While rising oil prices have dominated headlines, the real shock is unfolding in the fertilizer supply chain — a key pillar of global agriculture. The near disruption of the Strait of Hormuz, a vital trade route, has choked the movement of fertilizers and their raw materials, including urea, ammonia, and sulphur. Reuters reported that this corridor alone handles nearly one-third of global fertilizer trade, making it a strategic lifeline for farmers worldwide.
Fertilizer production, heavily dependent on natural gas, has also taken a hit as energy markets tighten. With gas prices surging, production costs for nitrogen-based fertilizers have increased sharply, forcing shutdowns and supply delays across key producing countries.
As a result, global urea prices have surged between 30% to 60%, with some markets reporting prices nearing $600 per tonne. This spike is already translating into higher input costs for farmers, particularly during critical sowing seasons.
Qatar based media Al Jazeera reported that Industry experts warn that the fertilizer shortage could push farmers to reduce usage — a move that directly impacts crop yields. Lower fertilizer application on staple crops such as wheat, rice, and maize could significantly reduce global food output, intensifying food inflation and supply shortages.
The ripple effects are already visible. Farmers in major agricultural economies are facing sharply higher planting costs, with fertilizer expenses rising by tens of thousands of dollars per farm. MarketWatch analysts caution that prolonged disruptions could even force farmers to shift to less fertilizer-intensive crops, altering global commodity supply patterns.
Developing countries, including Pakistan, are among the most vulnerable. With limited fertilizer reserves and heavy reliance on imports, these economies face a dual shock — rising input costs and weakening food security.
Council on Foreign Relations The crisis also underscores a structural risk: fertilizers account for up to 25% of total agricultural production costs, meaning any sustained price increase directly fuels food inflation. Global agencies warn that if the conflict persists, the fertilizer crunch could evolve into a full-blown food crisis, pushing millions more into hunger and accelerating inflation across agricultural commodities.
