A 50 kilogram bag of urea in rural Malawi now sells for nearly double what it cost six months ago. In Ohio, soybean farmer Scott Metzger is watching anhydrous ammonia trade at $931 a ton while corn futures sit at $4.55 a bushel. In Ethiopia, sacks of fertilizer are stranded in warehouses because there is no diesel to move them. None of these people fired a missile. None of them voted on the air war that started on February 28. But the war in Iran is showing up in their fields anyway, and the timing could hardly be worse.
The Strait of Hormuz has been a chokepoint in geopolitical analysis for so long that the phrase has acquired a kind of dead weight, the words you skim past in a wire story. What is harder to skim past is the fact that since US and Israeli strikes hit Iran on February 28, daily ship traffic through the strait has fallen from roughly 130 vessels to single digits. UNCTAD called it a 95 percent drop. The Iranian Revolutionary Guard Corps has confirmed 21 attacks on merchant ships and is widely reported to have laid mines. Brent crude crossed $100 a barrel on March 8 and peaked at $126. Those are the headlines. The fertilizer story is the one being written underneath them, in soil, and it will take longer to read.
A choke point most people never think about
Roughly one third of the world's seaborne fertilizer trade moves through Hormuz. About 20 percent of global LNG, the feedstock for nitrogen fertilizer production, moves through the same gap of water 34 kilometers wide at its narrowest. The Persian Gulf is also the planet's single largest exporter of urea, the workhorse nitrogen fertilizer that accounts for more than half of all nitrogen applied to crops globally. According to the World Economic Forum, 46 percent of internationally traded urea originates in the region. Saudi Arabia, Qatar, Iran, Bahrain, and the UAE, between them, dominate this market.
Strip 30 percent of the export supply out of any global commodity overnight, and prices move. Strip it out of fertilizer in February, four to six weeks before Northern Hemisphere planting hits its peak, and prices do something else.
FOB granular urea in Egypt, the bellwether contract for nitrogen pricing, has gone from a $400 to $490 per ton range before the war to roughly $700 by late March. CRU's Chris Lawson estimates 30 percent of exportable supply is simply not reaching the market. Oxford Economics' Alpine Macro pegs the urea price jump at 50 percent and ammonia at 20 percent. The DTN retail survey, which tracks what American farmers actually pay at the elevator, shows urea up 11 percent month over month and 22 percent year over year. UAN28, the liquid nitrogen many corn growers prefer for sidedressing, is 33 percent more expensive than a year ago.
What makes this different from the 2022 spike that followed Russia's invasion of Ukraine is the absence of a release valve. Russian and Belarusian fertilizer found alternative routes within a few months in 2022 because the trade was disrupted, not the production. This time, the production sites themselves are getting hit. Israeli strikes have damaged Ras Laffan Industrial City in Qatar, the world's largest LNG complex. Iran's Kharg Island has been struck. The pipeline Saudi Arabia built years ago to bypass Hormuz with crude oil exports does not carry ammonia. There is no equivalent infrastructure for fertilizer.
There are no strategic reserves either. Governments stockpile oil. They stockpile grain. They do not stockpile urea. When the IEA's Fatih Birol calls the current situation "the largest supply disruption in the history of the global oil market," at least there are 90 day SPR drawdowns to lean on. For ammonia and DAP, the cupboard is bare.
The places that will feel it first
A Carnegie Endowment analysis put it bluntly: a ship captain willing to brave drone strikes through Hormuz would rather carry oil than fertilizer. So would any navy escort, and the US Navy has not yet deployed escorts in any case. Scarce capacity goes to whichever cargo pays the most and politically matters the most. Fertilizer ranks low on both.
Ethiopia is in the middle of its planting season right now. The country imports about 90 percent of its oil through Hormuz and most of its fertilizer too. Local prices have risen by more than 70 percent, and fuel shortages mean that what fertilizer does arrive is sitting on docks instead of moving inland. Crop failure rates are estimated to be running 15 to 20 percent above normal already, and the rains have not even fully started.
In Malawi, Watson Samuel is a smallholder farmer in Lombwa Village who has never benefited from the country's fertilizer subsidy program. He told a local reporter that winter farming may simply collapse for households like his if prices keep climbing. Malawi has formally appealed to the World Bank's Rapid Response Facility for help. The Minister of Finance acknowledged the obvious, which is that a country importing nearly all of its fertilizer cannot easily out run a global price shock.
The IFDC, working with Sustain Africa and AfricaFertilizer, has reinstated the Global Fertilizer Crisis Response Group, the same coordinating body that was stood up during the 2021 to 2022 crunch. They identified West Africa as the highest risk zone because most of those countries are entering their primary rainy season, and fertilizer needs to be in country and moving through warehouses already, not still floating on a ship somewhere off Oman. It is not.
Asia's exposure is structurally different but no less serious. India and Pakistan use imported LNG as feedstock for their own nitrogen fertilizer plants. When Qatari LNG cargoes do not arrive, those plants throttle back. The shortage compounds. The International Rice Research Institute warned in March that prolonged disruption could shift the dominant risk from logistics to outright fertilizer and energy availability, "especially for Asia's next crop cycle." Rice is the most nitrogen-hungry major crop in the region. A 10 percent reduction in nitrogen application typically translates to a 5 to 8 percent yield hit, depending on soil and variety.
Brazil is in an awkward middle position. The country is one of the world's largest importers of Middle Eastern urea and was already feeling pressure from China's export restrictions. Beijing's National Development and Reform Commission effectively banned phosphate exports through August 2026 under a dual-track pricing model designed to protect domestic supply. Chinese urea exports are similarly throttled. Brazilian growers heading into their second corn crop, the safrinha, are looking at a margin squeeze that did not exist three months ago.
What farmers are doing about it
The cleanest signal of stress in any agricultural market is what gets planted. The USDA's Prospective Plantings report released March 31 showed American corn acreage shifting noticeably toward soybeans, which need a fraction of the synthetic nitrogen. Soybeans fix their own nitrogen through rhizobium bacteria in their root nodules. In a year when urea costs $677 a ton retail, that biology becomes a balance sheet decision. Australian growers are making the same call between nitrogen-hungry wheat and rapeseed versus barley, which tolerates lower fertility.
Some American farmers are hedging directly. CME Group launched a 10-ton Urea US Gulf futures contract last year, sized to match individual farm field needs rather than industrial scale exposure. Producers who would never have touched fertilizer derivatives before are now buying them, because the corn to urea ratio has hit a five-year high of 87 to 90 bushels of corn per ton of nitrogen. That ratio is a quick math check farmers use to decide whether the crop will pay for the inputs. Right now, in many cases, the answer is barely.
The longer term coping strategy is more troubling. Research from sub-Saharan Africa has documented that when fertilizer becomes too expensive, smallholder farmers do not just apply less. Some clear additional land instead, substituting hectares for nutrients. One study in ScienceDirect estimated that a 1 percent rise in local urea prices is associated with a 0.038 percent expansion of cropland, which sounds tiny until you realize it works out to roughly 11,000 additional hectares of land conversion per major price shock event. Most of that conversion comes from the forest. The fertilizer crisis is also, downstream, a deforestation crisis.
US producers, China, and a few others are partially insulated. Roughly 65 to 75 percent of US fertilizer consumption is met by domestic production, and the country's natural gas advantage is real. The Trump administration has suspended the Fertilizer Transportation Act for 60 days, lifted sanctions on three Belarusian potash producers, and is providing federal support for marine insurance on agricultural cargoes. China's urea output is 70 to 80 percent coal based, which insulates Beijing from the LNG shortage but adds carbon to a picture nobody wants to talk about right now. Coal fired ammonia produces roughly twice the emissions of natural gas based ammonia, and green ammonia, made through electrolysis powered by renewables, still accounts for less than 1 percent of global production.
Yara, the Norwegian giant that produces a meaningful share of European nitrogen, has been trying to pass costs through to customers. The company is running into what one analyst report called the "yield cliff," the point where farmers in Africa and parts of Europe simply cannot absorb another price increase and either reduce application rates or skip a season. Mosaic, the big North American phosphate and potash player, is in a different bind: every $10 per ton increase in sulfur, a key input, knocks $10 million off quarterly EBITDA. Higher end product prices and higher input costs cancel each other out.
The cleanest data point about how desperate things are getting came on March 27, when Iran agreed to a UN request to allow humanitarian and fertilizer shipments through the strait specifically to address the spring planting disruption. Five nations, China, Russia, India, Iraq, and Pakistan, were granted transit. Malaysia and Thailand negotiated their own access. The Philippines followed on April 2. This is what diplomacy under duress looks like: a piecemeal restoration of fertilizer flows because the alternative is hungry people in places that did not start the war.
The structural problem nobody wants to fix
For decades, fertilizer production has concentrated in regions with cheap natural gas or large mineral reserves. That logic produces low cost output under stable conditions and a pyramid of vulnerability the moment any tier of the supply chain breaks. Nitrogen fertilizer is bound to natural gas pricing the way airfares are bound to jet fuel. Phosphate is bound to a small number of geological deposits, dominated by Morocco, China, and the US. Potash is bound to an even smaller club: Canada, Russia, Belarus, and a handful of others.
Building a new fertilizer plant takes four to seven years and roughly $1 to $3 billion in capital. The IFA's November 2025 outlook projected nitrogen capacity growth of about 4 percent in 2026, which would be reasonable in a normal year and is utterly inadequate in this one. Capacity expansions in the pipeline are heading to the same regions that are already concentrated, because that is where the gas and the minerals are. Geographic diversification of fertilizer production is a 15-year project, not a 15 month one.
Green ammonia could change that math eventually. Electrolysis based production untethers nitrogen fertilizer from natural gas, which means it can be sited anywhere there is enough cheap renewable electricity. Pilot projects in Australia, Saudi Arabia, Chile, and the Iberian Peninsula are operating. The economics are still ugly without subsidy, and global capacity is a rounding error compared to the 180 million tons of nitrogen the world consumes annually. The Middle East, the same region that is now in conflict, was supposed to become a major green hydrogen and ammonia hub. Investor confidence in that buildout is not what it was on February 27.
On the demand side, the most underused tool is fertilizer use efficiency. The world has farmers applying 200 plus kilograms of nitrogen per hectare in some intensive systems, with significant losses to volatilization and runoff, and farmers in sub-Saharan Africa applying less than 20 kilograms and falling short of yields. Closing that gap, even partially, would do more for food security than building three new urea plants. It would also require extension services, soil testing infrastructure, and credit systems that most affected countries do not have. Controlled release coatings, microbial inoculants, and precision application technology all help at the margin and remain expensive.
If the fighting in the Gulf stops next month, fertilizer prices will come off their peaks within a quarter or two as ships return to the strait and stockpiles rebuild. Crop yields in the Northern Hemisphere will be hit but not catastrophically, because soils carry residual nutrients from prior seasons and farmers will have made their substitutions. The bill comes due in 2027, when the soil bank is drawn down and the next planting cycle reveals what undernourishment of crops actually does to harvest volumes.
If the fighting does not stop, or if it stops and starts again as it did when Iran reclosed the strait on April 18 in response to the US naval blockade, the math gets darker. The World Food Program's March estimate of 45 million additional people facing severe food insecurity assumed oil prices stayed above $100 per barrel and the conflict ran into summer. That number was published before Iran reclosed the strait. The next revision will not be smaller.
Watson Samuel, the smallholder in Lombwa Village, will plant what he can plant with what he can afford. He has never received a government subsidy and is unlikely to start now. Whether his maize comes in this year is going to depend on weather, on rainfall timing, on whether his neighbor lends him a few bags, and on a war he did not vote for being fought 6,000 kilometers away over a 34 kilometer wide gap of water. That is the actual fertilizer market.