How Fertilizer Disruptions in the Strait of Hormuz Could Drive the Next Food Price Surge

World Bank data shows fertilizer prices spiked sharply in early 2026, including a roughly 46% month‑on‑month surge in urea prices between February and March.

Looking ahead, the World Bank warns that fertilizer prices could rise another 31% during 2026 if supply disruptions persist.

When margins shrink this quickly, farmers tend to respond in predictable ways.

Farmers Typically Cut Fertilizer Use First

Fertilizer is one of the largest variable costs in crop production. When prices spike, farmers often:

• Reduce application rates
• Delay purchases
• Switch to less fertilizer‑intensive crops
• Cut planted acreage in extreme cases

Research on fertilizer markets shows that sustained price spikes can lead farmers to reduce nutrient use, which directly lowers crop yields.

These adjustments protect short‑term finances but often reduce output in the next harvest cycle.

Lower Fertilizer Use Leads to Lower Yields

Crop yields depend heavily on nitrogen and phosphate fertilizers. When application rates fall across many farms simultaneously, global production of major staples—such as wheat, maize, and rice—can decline.

Even modest yield reductions across major agricultural regions can tighten global inventories and push commodity prices higher. Because planting and harvesting occur months after fertilizer purchases, the inflationary effects often appear with a lag.

This delay is already reflected in global data: while staple food prices were still broadly stable early in 2026, several forward‑looking indicators suggest growing inflationary pressure due to rising fertilizer and energy costs.

Import‑Dependent Countries Face the Biggest Risk

Countries that rely on imported fertilizer—and also depend on imported food—are particularly vulnerable.

They face a two‑stage shock:

1. Higher fertilizer costs raise domestic farming expenses.
2. Reduced global crop supply raises international food prices.

Regions such as parts of Africa and South Asia are especially exposed to fertilizer supply disruptions linked to the Gulf region.

Weather Could Amplify the Shock

Agricultural markets are already sensitive to climate variability. If major weather disruptions occur at the same time as fertilizer shortages, the effects can compound.

For example, climate events that reduce crop yields—such as El Niño‑related droughts or heat waves—could coincide with reduced fertilizer usage. In that scenario, the combined supply shock could significantly tighten global grain stocks and accelerate food price inflation.

Why Food Inflation Often Appears Months Later

Agricultural supply chains operate on seasonal cycles. That means input shocks do not immediately translate into supermarket prices.

Instead, the typical sequence looks like this:

1. Conflict disrupts fertilizer production or shipping.
2. Fertilizer prices surge.
3. Farmers cut fertilizer use or adjust planting decisions.
4. Crop yields decline in the next harvest.
5. Global food supplies tighten and prices rise.

Because each step unfolds over months, the inflationary impact often appears well after the original shock.

The Bottom Line

The fertilizer surge triggered by disruptions around the Strait of Hormuz may not cause immediate food inflation—but it raises the risk of a delayed global price wave.

Higher input costs, squeezed farm margins, and potential weather shocks are already influencing planting decisions. If fertilizer prices remain elevated through upcoming planting seasons, the effects could show up in weaker harvests and tighter global food supplies in the next agricultural cycle.

In other words, today’s fertilizer shock could become tomorrow’s food inflation.