Strait of Hormuz fertiliser supply disruptions are raising concerns for India’s agriculture sector as shipments remain stranded due to the ongoing Iran war. Analysts warn the crisis could affect nearly one-third of global fertiliser trade and push up prices for key inputs such as sulphur and ammonia.
The shipping disruption could affect nearly one-third of the global fertiliser trade, particularly supplies of key chemicals such as sulphur, which is essential for fertiliser production.
India Faces High Risk During Key Fertiliser Import Window
India is among the countries most exposed to the disruption because its fertiliser import window begins soon. According to research agency BMI, a unit of Fitch Solutions, the timing of the conflict is critical for India’s agricultural sector.
India’s fertiliser demand typically rises between late March and April, ahead of the sowing season. Corn sowing begins in May, and the crop is among the most fertiliser-intensive in the country.
“This means the conflict is occurring during a key import window ahead of both peak application and production periods,” BMI said.
Strait of Hormuz Critical for Global Fertiliser Trade
Around 20–30% of global fertiliser exports pass through the Strait of Hormuz, including urea, ammonia, phosphates and sulphur, according to Joseph Glauber, Research Fellow Emeritus at the International Food Policy Research Institute (IFPRI).
A prolonged conflict could choke maritime trade through the Persian Gulf, pushing up global fertiliser and energy prices.
“A prolonged conflict would likely choke global sea trade with the Persian Gulf region, raising the costs of energy and fertilizer prices globally and directly threatening food security,” Glauber said.
Gulf Countries Key Fertiliser Suppliers
Countries in the Gulf region, including Bahrain, Oman, Qatar and Saudi Arabia, are major exporters of fertilisers such as urea, diammonium phosphate (DAP) and anhydrous ammonia.
Michael Werz, Senior Fellow at the US-based Council on Foreign Relations, said disruptions to shipping through the Strait of Hormuz could have cascading effects on global fertiliser markets.
“The shipment of natural gas has declined sharply, which affects feedstock for nitrogen-based fertilisers,” Werz said.
Fertiliser Prices Already Rising
The disruption has already pushed global fertiliser prices higher.
Middle East urea prices rose about 19% in a week
US Gulf granular urea prices jumped nearly 16%
US Gulf DAP prices reached $655 per tonne
Higher natural gas prices have also contributed to rising fertiliser costs because natural gas is a key input in producing nitrogen fertilisers.
Sulphur Supply Risks for Fertiliser Production
Sulphur is another key chemical used in producing phosphate fertilisers and nitrogen blends.
According to BMI, supply disruptions in sulphur exports from the Gulf region pose a risk to the global fertiliser industry, though the impact may remain moderate if the conflict ends quickly.
China, which relies on sulphur imports from the region, may face supply risks. However, the Chinese government has prioritised sulphur allocation to fertiliser producers, helping protect domestic production.
Reduced Fertiliser Use Could Affect Crop Yields
Experts warn that if the conflict lasts more than a month, fertiliser use in India could decline due to supply shortages and rising prices.
The risk could worsen if an El Niño weather event reduces rainfall during the growing season.
Lower fertiliser application combined with weather stress could reduce crop yields and potentially trigger export restrictions in major agricultural markets.
India May Turn to Russia for Fertiliser Supplies
India could attempt to increase fertiliser imports from Russia to offset supply disruptions.
However, BMI said replacing lost volumes from the Gulf region would become increasingly difficult if the conflict extends beyond three months.
“At that point, reduced fertiliser application becomes unavoidable,” the agency warned.
Rising Costs Pressure Farmers Worldwide
Although fertiliser prices remain below the record highs seen in 2021 and early 2022, rising costs are squeezing farmers who are already facing lower prices for crops such as grains and oilseeds.
Higher fertiliser costs could push farmers to plant less fertiliser-intensive crops such as rice, wheat or maize, or reduce fertiliser application altogether.
Such shifts could eventually affect global crop production and food prices.
Strait of Hormuz fertiliser supply
