Strait of Hormuz crisis: profound implications for global agriculture and fertilizer supply
The disruptions in the Strait of Hormuz, ongoing since late February, are exerting severe pressure on the global agricultural economy. This crisis has emerged following attacks on Iran by the United States and Israel, prompting Iran to nearly close the Strait of Hormuz—thereby crippling not only global oil flows but also the international fertilizer supply chain.
In early March, urea prices at the New Orleans hub surged from USD 516 per ton to USD 683 per ton, marking an increase of approximately 32 percent. By mid-March, prices escalated further, reaching USD 700 per ton or more in the Middle East with certain markets witnessing increases of up to 40–50 percent. Ammonia prices have also risen by approximately 20–24 percent. According to Máximo Torero, Chief Economist of the Food and Agriculture Organization (FAO), the complex situation in the Strait of Hormuz led to a 19 percent increase in urea prices in the Middle East and a 28 percent rise in Egypt during the first week of March. FAO estimates suggest that if the crisis persists, global fertilizer prices could remain 15–20 percent higher on average during the first half of 2026.
Globally, approximately 30–35 percent of urea exports (with some estimates indicating exposure of up to 49 percent) are affected by this critical route. Data indicates that nearly one-third (33 percent) of global fertilizer trade passes through this corridor, including 34 percent of urea, 23 percent of ammonia and 18–20 percent of phosphates. Gulf countries—including Qatar, Saudi Arabia and Iran—are major producers of urea and ammonia. The disruption is impacting an estimated annual fertilizer capacity of around 16 million tons. Several producers have declared force majeure while the absence of viable alternative routes has further constrained supply.
The surge in fertilizer prices and uncertainty in supply have compelled farmers to reassess their cropping strategies. In the United States, where corn requires substantial nitrogen-based fertilizers, farmers are showing a tendency to reduce corn cultivation by 1 to 1.5 million acres and instead increase soybean acreage by a similar or greater margin as soybeans require comparatively less fertilizer. This shift could have downstream implications for global grain supply, livestock feed availability and ultimately the prices of meat and dairy products.
This is not merely a maritime oil chokepoint issue; it represents a disruption at the core of the global fertilizer supply chain. Urea plays a fundamental role in agricultural productivity and a price increase of 30–50 percent or more constitutes a significant shock. The crisis has coincided with the onset of the spring planting season, forcing farmers either to reduce fertilizer application—potentially lowering yields—or to switch to less fertilizer-intensive crops.
Developing countries such as Brazil, India, Pakistan and Bangladesh are particularly vulnerable as they are major fertilizer importers. In Pakistan, alongside increased reliance on imports, additional pressure may also fall on domestic production, which is dependent on natural gas.
As a major fertilizer-importing country, Pakistan is directly exposed to fluctuations in global prices which can quickly transmit to the domestic market. However, it is encouraging that, according to informed sources, the Ministry of National Food Security and Research has already undertaken proactive measures. These include ensuring adequate availability of urea and DAP stocks for the Kharif season and implementing strict actions against hoarding. Such measures reflect timely planning and an effective strategy which will help maintain market stability, safeguard farmers’ interests and mitigate the impact of potential supply shocks. Overall, these steps represent a positive and commendable development for the agricultural sector.
In the longer term, if disruptions in the Strait of Hormuz persist, the consequences could surpass those of the 2022 Russia–Ukraine crisis in severity. Fertilizer and grain prices may rise further, exacerbating food insecurity in poorer nations. This situation underscores the fragility of global agriculture in the face of supply chain vulnerabilities and geographic chokepoints. Indeed, the disruption of a single maritime route has the potential to affect food availability and prices worldwide with the greatest burden ultimately falling on farmers and consumers.
Even if the Strait of Hormuz reopens in the near term, its effects may linger for several months as production and shipping systems require time to normalize. Therefore, it is imperative for affected countries to enhance domestic fertilizer production, explore alternative supply sources and provide greater support to farmers as an urgent and necessary course of action.
Copyright Business Recorder, 2026