ME tensions: Agri economy, fertilizer supply chains disrupted

LAHORE: The ongoing geopolitical tensions in the Hormuz Strait and the partial disruption of maritime routes have significantly affected the global agricultural economy and fertilizer supply chains. As a result, fertilizer prices in international markets are rising rapidly, while supply uncertainties have intensified, with repercussions being felt across major agricultural economies, including Pakistan.

At the global level, notable increases have been recorded in the prices of key fertilizers such as urea and ammonia. This escalation is increasing agricultural production costs and raising concerns regarding food security. Experts indicate that disruptions along the trade routes passing through the Hormuz Strait have adversely impacted the global movement of fertilizers, as a substantial volume of agricultural raw materials and fertilizer shipments is transported through this strategic corridor.

Commenting on the situation, agricultural expert and Head of the Transfer of Technology Department at the Cotton Research Institute (CRI) Multan, Sajid Mahmood, stated that the crisis, persisting since late February, has led to a sharp increase in global urea prices. He noted that urea prices at the New Orleans hub have risen from $516 to $683 per ton, while in certain Middle Eastern markets prices have increased by up to 50 percent, exceeding $700 per ton. He further highlighted that ammonia prices have also increased by 20 to 24 percent, posing a significant threat to global food security.

He explained that approximately one-third of global fertilizer trade passes through this route, including significant volumes of urea and ammonia. Gulf countries remain major producers of urea, and the disruption has impacted millions of tons of fertilizer supplies annually. The declaration of force majeure by several major producers has further tightened global supply conditions.

He also cautioned that rising fertilizer prices are influencing global cropping patterns. In the United States, farmers are shifting from corn, which requires higher fertilizer input, toward soybean cultivation. This transition may affect overall grain availability and could also contribute to rising prices of meat and dairy products due to reduced feed supply.

Regarding Pakistan, Business Recorder reports that since the country is a major importer of fertilizers, fluctuations in global prices are likely to have a direct impact on the domestic market. However, according to the publication’s observations, the Ministry of National Food Security and Research has already taken preemptive measures for the upcoming Kharif season by ensuring the availability of sufficient stocks of urea and DAP, along with strict actions against hoarding. These measures reflect timely planning and effective governance, contributing to market stability, protecting farmers’ interests, and mitigating the impact of potential supply shocks. Overall, Business Recorder considers these steps a positive and commendable development for the agricultural sector.

Sources further indicate that Pakistan will need to focus on a long-term strategy aimed at enhancing domestic fertilizer production, diversifying import sources, and ensuring continued support for farmers, as normalization of global supply chains may take considerable time.

Copyright Business Recorder, 2026