The Fertilizer Crisis: How the Middle East Conflict Is Disrupting the Global Planting Season

Global Shock

In March 2026, the global fertilizer market came under severe pressure amid escalating conflict around Iran and the effective blockade of the Strait of Hormuz—a critical artery for world trade. Not only does a significant portion of oil and gas shipments pass through it, but also critical volumes of fertilizers from Persian Gulf countries. The region's largest producers are Saudi Arabia, Qatar, and the UAE, which output 50-55 million tons annually. By various estimates, this route accounts for about a third of global maritime fertilizer shipments, including up to 30% of urea exports, around 25% of phosphate fertilizer deliveries, and nearly 45% of global sulfur exports—a vital raw material for phosphate production.

The deteriorating situation quickly impacted prices. Within just a few weeks, key fertilizer types rose an average of 30-40%: urea prices climbed from $482.5 to $720 per ton by mid-March, while ammonia increased roughly a quarter, to $600 per ton. Fitch Ratings analysts have already revised their 2026 market forecast, expecting at least a 25% price increase. Under an unfavorable scenario, if supply constraints persist, prices could rise even more sharply—up to 90% or higher.

The problem lies not only in disrupted logistics but also in the sharp rise in raw material costs. The production cost of nitrogen fertilizers depends 60-80% on gas prices, which have reached multi-year highs amid the crisis. Strikes on energy infrastructure in Persian Gulf countries have resulted in partial capacity losses: for instance, in Qatar, one of the world's largest LNG exporters, about 17% of the country's export capacity has been knocked offline.

As a result, national oil and gas company QatarEnergy has already declared force majeure on several contracts, including deliveries to Europe and Asia, and warned of potential losses up to $20 billion in annual revenue. All this intensifies pressure on the fertilizer market and creates conditions for further price increases.

Global Farmers on the Brink

The consequences of price spikes and fertilizer supply disruptions are already manifesting at the farm level—and we're talking about rethinking the very logic of planting. In several countries, farmers are facing the need to change their crop structure to stay within budget.

In the US, agricultural producers are massively considering switching from corn to soybeans: the latter requires significantly less nitrogen fertilizer and costs less to cultivate. The industry warns that prices have risen so rapidly that many farmers simply didn't have time to pre-book necessary volumes. But even those who managed to pay for fertilizers in advance risk facing delivery delays: according to experts, shipping from the Middle East to northern states can take up to two months.

European farmers are also concerned about fertilizer supply stability: against the backdrop of reduced exports from Qatar and other Persian Gulf countries, EU agricultural producers are being forced to more actively seek alternatives, including turning to Russian products, which remain expensive due to duties and sanctions. Ultimately, European farmers, like their American counterparts, must revise their planting plans, even though the spring campaign is already underway.

In South America, Brazil is particularly vulnerable: the country covers about 80% of its fertilizer needs through imports. Against the backdrop of disruptions and price increases, the cost of urea delivered to Brazil jumped roughly 35% in two weeks, prompting farmers to increasingly look toward cheaper substitutes, including ammonium sulfate.

Thus, farmers worldwide face a choice: increase costs amid instability or economize. This forced austerity regime has negative consequences that cannot be ignored: reduced fertilizer use typically leads to deteriorating crop yields and quality. Collectively, this means reduced supply on the global market and intensifies pressure on global food security.

Russia: Domestic Fertilizers, but Its Own Challenges

Russia is one of the world leaders in fertilizer production and exports. In 2025, domestic enterprises produced a record 65.4 million tons, trailing only Chinese manufacturers. The country also accounts for roughly 19% of global fertilizer exports, with Brazil (11.1 million tons), India (5.5 million tons), and China (4.9 million tons) as key buyers in 2025, representing about half of Russian deliveries. The combined share of the US and EU in Russia's trade totaled over 20% last year.

To protect the domestic market from volatility in global fertilizer prices, the government imposed export restrictions back in 2021. Temporary quantitative export quotas on fertilizers were established then and remain in effect: through May 31, 2026, the quota is set at 18.7 million tons (over 10.6 million tons of nitrogen fertilizers and more than 8 million tons of complex fertilizers). Additionally, on March 24, 2026, authorities separately suspended ammonium nitrate exports for one month—until April 21—with exceptions only for intergovernmental contracts. This measure is designed to guarantee sufficient supplies for spring planting and prevent domestic shortages.

However, in practice, the situation is far from ideal. Farmer Nikita Tokmakov, author of the eponymous Telegram channel, told Argument Media that in the view of many agricultural producers, fertilizers are de facto practically unavailable to them.

"You try to buy, to pay, but for one reason or another, more than half of orders are rejected, shipments fall through, deliveries are postponed. This is already a real problem right now."

He emphasizes that any easing of quotas in favor of exporters would only worsen the situation. Nitrogen fertilizers directly affect final yields: if you don't apply them, there will be no harvest.

A separate sensitive issue is the indexation of domestic prices. Maximum fertilizer prices were fixed in 2021; in June 2022 they were indexed by 5%, in September by another 5-10%, with no further indexation since. For several years now, producers have been asking the government to allow raising the maximum price level by at least 10%, citing rising production costs. However, authorities have so far restrained this process to prevent sharp price increases for agricultural producers. The farmer considers talk that prices "aren't rising" a dubious claim.

"They were fixed at a historical peak, then they rolled back slightly to normal levels and haven't risen above that peak. Whether they index or not—in fact, we're seeing price increases."

Meanwhile, fertilizers account for up to 30% of direct costs, and for certain crops even more. At the same time, farm profitability is declining annually: for some crops it's already zero or negative.

"Further price increases will critically hit production profitability, — warns Tokmakov. — This could lead to farm bankruptcies and will certainly result in falling harvests. People will start economizing and simply won't apply fertilizers."

In the farmer's opinion, rising global fertilizer prices won't necessarily lead to more expensive agricultural products and final retail prices—it directly depends on how domestic prices change.

"We're a major fertilizer producer and hardly import any, so domestic prices should be capped, just as they cap prices on our products with export duties."

Tokmakov adds that he supports a free market, but since the government already regulates this segment, the rules should be uniform across the entire chain. This means restrictions should extend to means of production as well, so that fluctuations in their domestic prices don't increase production costs for farmers and final prices for consumers.

Thus, on one hand, Russia as a major fertilizer exporter benefits from explosive price growth and maintains strong positions in the global market. On the other hand, the domestic agricultural sector remains vulnerable to price signals. If rising global prices begin translating more strongly into domestic ones, this will inevitably affect agricultural production costs, and then prices for end consumers. That's precisely why the question of balancing export revenues for producers and fertilizer affordability domestically is becoming one of the key issues for the entire agricultural sector.