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The global fertilizer market is entering uncharted territory in 2026. With prices projected to surge 31% for the year — reaching their least affordable level since the 2022 energy crisis — the World Bank warns that a toxic convergence of Middle East supply disruptions, Black Sea instability, and an emerging El Niño is creating a structural food security crisis. Roughly one-third of global urea trade transits the Strait of Hormuz, and as diplomatic talks between the US and Iran remain uncertain, the effective closure of this chokepoint has sent shockwaves through agricultural markets worldwide. This article examines the strategic chokepoints, price transmission mechanisms, and policy options for building resilience in a fragmented global fertilizer market.
The Strait of Hormuz: A Chokepoint Under Siege
The Strait of Hormuz is one of the world's most strategically important waterways, handling about 20% of global LNG and 25% of seaborne oil annually. But beyond energy, it is also the conduit for roughly one-third of globally traded fertilizer products — approximately 16 million tonnes per year. The Gulf region supplies 30–35% of global urea exports and 20–30% of ammonia exports, with key production facilities in Qatar, the UAE, Saudi Arabia, Iran, and Jordan.
In June 2026, Iran's IRGC declared the strait effectively closed following Israeli strikes on Lebanon, causing ship transits to plummet from over 100 vessels daily to just 12. Even a brief reopening after a US-Iran agreement failed to restore normal flows, peaking at only 25 vessels. The impact was immediate: Middle East urea prices rose 19% to over $590 per tonne, Egyptian urea jumped 28% to $625 per tonne, and DAP reached $655 per tonne. By March 2026, urea prices had surged 53.7% month-on-month to $725.6 per tonne, potentially exceeding 2022 averages. The Strait of Hormuz crisis has exposed the fragility of just-in-time fertilizer supply chains with no strategic stockpiles and limited alternative production capacity.
Black Sea Instability: A Second Front
While the Middle East crisis dominates headlines, the Black Sea region remains a critical theater in the fertilizer geopolitics. Russia and Belarus dominate potash and key nutrient production, but face export challenges due to sanctions and the ongoing war in Ukraine. Russia produced over 63 million tonnes of fertilizer in 2024, with over half shipped to BRICS nations — particularly Brazil, whose fertilizer imports surged to 11.54 million tonnes in early 2025.
However, the Black Sea corridor is far from stable. Drone strikes on commercial tankers have doubled war risk insurance premiums, pushing the Black Sea Freight Index to a 21% year-on-year increase. A severe cold snap in January 2026, with temperatures dropping to -15°C across Russia and Ukraine, left nearly 37% of winter wheat crops in poor condition, threatening widespread winterkill. Russian wheat estimates for 2026 have been revised down to ~85.5 million metric tons. The Black Sea fertilizer trade remains a tightrope walk between ample harvests and escalating logistical risks.
The El Niño Wildcard
Compounding these supply-side shocks is the looming threat of El Niño. The World Meteorological Organization estimates an 80% probability of El Niño emerging by mid-2026, with probabilities rising to near 90% for the remainder of the year. The World Bank's Food Security Update warns that El Niño could reduce rice output by 20–50% in affected regions, including South Asia and Southern Africa.
In Southern Africa, below-average rainfall and extreme heat are expected from October 2026 to March 2027, affecting Zimbabwe, Mozambique, Malawi, and Zambia. In East Africa, below-average rains in Ethiopia and flood risk in the eastern Horn create a mixed but dangerous picture. The El Niño impact on agriculture is particularly concerning because it coincides with already elevated input costs, creating a double burden for farmers who must pay more for fertilizer while facing lower yields.
Price Transmission and the Burden on Low-Income Nations
The transmission of fertilizer price shocks to food prices is well-documented but often delayed. FEWS NET's March 2026 analysis identifies three primary risks: physical supply chain disruptions from the Middle East, structural production capacity loss, and rising global fertilizer prices driven by energy costs. Vulnerability varies by region. Asia — especially Bangladesh and Pakistan — faces high dual-axis risk due to heavy Gulf import dependence and intensive fertilizer use. In Latin America, price transmission is the main concern, while sub-Saharan Africa faces high input price sensitivity among smallholder farmers despite low application rates.
Countries like Kenya, Tanzania, Uganda, and South Africa have direct exposure to Gulf supply disruptions. The World Food Programme warns that up to 45 million more people could face acute food insecurity as a result of the crisis. Domestic food price inflation remains moderately high, with 45% of low-income countries experiencing food inflation above 5%. The fertilizer price impact on food security is disproportionately severe for import-dependent low-income nations that lack the fiscal space for subsidies or strategic reserves.
Policy Responses: From Emergency Measures to Long-Term Resilience
Governments worldwide have scrambled to respond. According to FAO's May 2026 Agrifood Policy Highlights, 37% of all recorded policy actions in April 2026 were linked to the Middle East conflict, with about 11% specifically addressing fertilizer disruptions. Exporting countries prioritized trade restrictions and boosting domestic production: China extended urea export restrictions, and Russia extended fertilizer quotas until December 2026. Importers focused on farmer subsidies, tax relief, and securing alternative supply routes: India exempted ammonium nitrate from import taxes, while Bangladesh and Thailand secured supplies from Russia.
The African Union is accelerating efforts to triple domestic fertilizer production by 2034 under the Nairobi Declaration. Ghana announced a free fertilizer distribution scheme for the 2026 farming season, replacing its subsidy program. The IFDC launched its Strategy 2026–2035, focusing on fertilizer innovation, farmer-centered solutions, and systems-level transformation, including a Global Network of Fertilizer Innovation Centers (GNFIC).
However, these measures remain largely reactive. The strategic fertilizer reserves policy debate is gaining traction, with experts calling for internationally coordinated stockpiling mechanisms similar to strategic petroleum reserves. The G7 agriculture ministers convened an extraordinary session in June 2026 to address supply diversification, but concrete commitments remain elusive.
Expert Perspectives
"The convergence of the Hormuz closure, Black Sea instability, and El Niño is unprecedented in modern history," says Dr. Amina Diallo, a senior food security analyst at the World Bank. "We are looking at a perfect storm that could push tens of millions into acute food insecurity. The fertilizer price spike is not just a cost issue — it's a supply availability issue that will affect planting decisions for the next two to three seasons."
FAO Director-General Qu Dongyu called the Hormuz closure a global food security risk, noting that "the world cannot afford another supply chain shock when we are still recovering from the impacts of the war in Ukraine."
FAQ
Why are fertilizer prices rising so sharply in 2026?
Fertilizer prices are rising due to a combination of factors: the effective closure of the Strait of Hormuz (through which one-third of global urea trade passes), ongoing Black Sea instability affecting Russian and Belarusian exports, and the emerging El Niño weather pattern threatening crop production. The World Bank projects a 31% annual increase for 2026.
How much fertilizer passes through the Strait of Hormuz?
Approximately 16 million tonnes of fertilizer products transit the Strait of Hormuz annually, representing about one-third of globally traded fertilizers. The Gulf region supplies 30–35% of global urea exports and 20–30% of ammonia exports.
Which countries are most vulnerable to the fertilizer crisis?
Low-income, import-dependent nations in South Asia (Bangladesh, Pakistan), sub-Saharan Africa (Kenya, Tanzania, Uganda, South Africa), and Latin America are most vulnerable. Countries with heavy reliance on Gulf imports and intensive fertilizer use face the highest risk.
What is the link between El Niño and fertilizer prices?
El Niño threatens crop yields in South Asia and Southern Africa, reducing agricultural output and potentially increasing demand for fertilizer to compensate for lost productivity. However, high fertilizer prices may prevent farmers from applying adequate inputs, creating a vicious cycle of lower yields and higher food prices.
What policy options exist to mitigate the crisis?
Options include strategic fertilizer stockpiles, diversification of supply sources, domestic production incentives, targeted subsidies for smallholder farmers, trade facilitation for alternative routes, and international coordination mechanisms. The African Union's Nairobi Declaration aims to triple domestic fertilizer production by 2034.
Conclusion: A Structural Shift in Global Fertilizer Markets
The 2026 fertilizer crisis is not a temporary spike but a structural shift in global agricultural markets. The fragmentation of supply chains, the weaponization of strategic chokepoints, and the compounding effects of climate change are creating a new normal of higher and more volatile input costs. Building resilience will require a combination of strategic stockpiling, supply diversification, investment in domestic production capacity, and international cooperation on trade facilitation. Without decisive action, the fertilizer-food-climate nexus will continue to threaten global food security for years to come.
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