Choked shipping in the Strait of Hormuz isn’t just slowing oil tankers. The Iran war is delivering a one-two punch to the global fertilizer supply by blocking both exports of fertilizer and a key ingredient needed to make it. A temporary ceasefire reached on Tuesday may ease the blockage, but its effects remain uncertain.
Nearly half of the world’s traded urea — the most widely used nitrogen fertilizer — comes from the Gulf, which also supplies about one-fifth of global liquefied natural gas (LNG). The Haber‑Bosch process, which combines atmospheric nitrogen with hydrogen to make ammonia (the basis for nitrogen fertilizers), depends on hydrogen often derived from natural gas. Disruptions to LNG therefore cut into ammonia and urea production.
Fertilizer and LNG plants from Qatar to Bangladesh have already begun shutting down. What happens next depends on how quickly shipping through the strait resumes.
Fuel and fertilizer shortages are likely to push food prices higher, with the poorest countries suffering most. Governments and farmers face difficult choices to adapt.
Government responses
The fastest responses are policy levers that control supply or demand. Some governments can tap national stockpiles: India holds large reserves of rice and wheat, and China — the world’s largest fertilizer producer — maintains massive fertilizer stocks.
Governments can also absorb higher fertilizer costs through subsidies rather than passing them to farmers. After Russia’s 2022 invasion of Ukraine, India raised its fertilizer subsidy substantially to shield farmers. Countries can also restrict exports to keep supplies domestic, something China has done repeatedly since 2021.
These measures are often zero-sum. When a country stockpiles or restricts exports, it may safeguard its own producers but harm farmers abroad. Such options are mainly available to wealthier nations; poorer neighbors like Bangladesh, Nepal and Sri Lanka may lack the fiscal space to subsidize or stockpile.
Shift crops
Farmers can switch to less fertilizer‑intensive crops. Legumes such as soybeans fix atmospheric nitrogen and require much less synthetic nitrogen than crops like corn. The US predicted a modest shift toward soybean planting in response to expected fertilizer and input pressures.
But crop switching isn’t feasible everywhere. In parts of Asia, heavy monsoon rains limit crop choices, and rice is a dietary staple that farmers cannot simply abandon.
Use fertilizer more efficiently
If changing crops isn’t an option, farmers can change practices. Much fertilizer is wasted: estimates suggest only about half of applied fertilizer is taken up by crops, with the rest leaching into groundwater or released as nitrous oxide, a potent greenhouse gas.
Precision agriculture — using drones, cameras, sensors and AI to monitor crop needs and apply fertilizer exactly when and where it’s needed — can markedly improve efficiency. But these tools can be costly and slow to roll out in poorer regions.
Behavioral and policy changes can also help. When fertilizer is heavily subsidized, farmers lack incentives to economize. In Bangladesh, after urea prices rose in 2022, farmers reduced usage without harming rice yields, showing considerable scope for improved efficiency even without high-tech solutions.
Produce fertilizer differently
Longer-term approaches include alternative ways to supply nitrogen. Biological approaches, such as microbial seed coatings that help plants capture atmospheric nitrogen, are being developed and deployed. For example, some startups report large-scale use of microbes to reduce dependence on synthetic nitrogen in parts of the US.
However, these technologies are medium‑ to long‑term fixes and cannot quickly offset acute supply disruptions. What is needed first is stabilization of fertilizer supply chains.
The immediate picture
What makes the current situation severe is the scale of lost supply. Market analysts warn that the world is losing fertilizer supply at unprecedented levels. Until shipping routes and production stabilize, food prices and production risks will remain elevated, and the world’s poorest populations will be most exposed.
Edited by: Sarah Steffen
