“We have a few weeks to avoid what will probably be a major humanitarian crisis,” warned Jorge Moreira da Silva, head of a UN working group tasked with clearing the passage of fertilizers in the Strait of Hormuz on Monday, May 11. In addition to oil and gas products, fertilizers produced by countries in the Persian Gulf have been blocked for over two months.
The former Portuguese MEP believes that “we could witness a crisis that will plunge an additional 45 million people into hunger.”
Iran is indeed blocking this strategic passage in retaliation for the war triggered by the United States and Israel on February 28. It usually sees “a third of the world’s fertilizer trade passing through maritime routes,” amounting to nearly 16 million tons. The Persian Gulf region is one of the world’s main producers, providing “30 to 35% of the world’s urea exports,” the most widely used fertilizer in the world, and approximately “20 to 30% of ammonia exports,” according to a note from the UN Food and Agriculture Organization (FAO).
If ships carrying these resources worldwide are blocked, production sites have also been affected by the war: the Qatari refinery of Ras Laffan and its ammonia plant were targeted on March 2. Factories in the United Arab Emirates, Saudi Arabia, Iran, Jordan, and Qatar have suspended or reduced their production.
The Persian Gulf is also a key transit point for raw materials like sulfur and ammonia, which other countries use to produce their own fertilizers. This is the case for Morocco, Tunisia, and South Africa, who have had to reduce their production since the conflict began. According to the International Food Policy Research Institute (IFPRI), liquefied natural gas, of which 20% of global trade comes from Gulf countries, is also “the main energy source for ammonia production, a key component of all nitrogen fertilizers.”
“In India, some urea producers have begun to reduce their production,” and “in Pakistan, the gas supply to some fertilizer plants has been suspended,” reports the French Treasury Directorate.
“Unlike oil, there is no internationally coordinated strategic reserve for fertilizers. When the supply is disrupted, it remains disrupted,” notes Jaron Porciello, a researcher at Cornell University (USA), on The Conversation website.
Facing these disruptions in global fertilizer supply, which countries are most affected and vulnerable? To address this question, David Laborde, director of the FAO’s agri-food economy division, proposes asking three more questions: “Does the country use a lot of fertilizers? Are these fertilizers imported? Do these imports come from the Gulf?” The region is a major supplier to many African, Asian, and Latin American countries.
“Many African economies heavily depend on fertilizers imported from Gulf producers,” underscores the FAO. Sudan imports 54% of its fertilizers from there, Tanzania 31%, Somalia 30%, Kenya 26%, and Mozambique 22%, according to the UN. “Malawi is one of the African countries that uses the most fertilizers. It depends on almost 100% of imports, 60% of which comes from the Gulf,” adds David Laborde.
The stakes on the continent are huge: the agricultural sector is “dominated by small-scale farmers with limited capacity to absorb rising input costs or supply disruptions,” notes the journal Le Grand Continent.
Asian countries are also among the hardest hit. Jordan imports 79% of its fertilizers from the Persian Gulf, Bangladesh 53%, Sri Lanka 36%, Pakistan 27%. As for India and China, they each import around 20% of their fertilizers, the UN reports. Their situation is even more precarious as these countries practice intensive agriculture, applying large amounts of fertilizers per hectare.
“Delayed or insufficient deliveries could result in a drop in yields of staple crops such as rice, wheat, and maize later in the year,” fears the FAO. “This represents a particularly serious risk for densely populated regions in Asia, where these crops make up the majority of food consumption and are crucial to food security.”
Experts also mention Brazil, a major exporter of soybeans, maize, and sugar, which sources one-fifth of its fertilizers from the Gulf. “If Brazilian farmers reduce their fertilizer use, agricultural yields will inevitably decrease,” with consequences for global food markets, cautions the FAO.
“Even if the fertilizers were to pass, it wouldn’t solve all the problems.”
David Laborde, director of the FAO’s agri-food economy divisionvia franceinfo
In addition to fertilizer availability, transportation is also a concern. Agriculture relies on fuel, which is also partially blocked in the Strait of Hormuz, to operate tractors, import seeds, and send produce to markets. “The Middle East war affects our ability to produce food, process it, move it, or, as in India where the population uses natural gas, cook it,” details David Laborde. Added to this is the looming threat of the return of El Niño, a phenomenon that disrupts global agriculture, feared by scientists by the end of the year. “If we have a very strong episode, agricultural production will be damaged,” David Laborde fears.
In the fields, the effects are already visible. On a larger scale, global prices have already sharply increased. If the war continues, prices are expected to be 15 to 20% higher in the first half compared to last year, according to the FAO. Experts predict that this rise will mechanically lead to a decrease in agricultural productivity, followed by a surge in food prices.
Governments are trying to cope. “India, which heavily subsidizes fertilizer purchases for fifty years, has realized that its fiscal capabilities cannot be extended indefinitely and [Prime Minister] Narendra Modi has called for agriculture that uses fewer fertilizers,” assures David Laborde. In Bangladesh, The Daily Star reports that the country has issued a tender to find alternative fertilizer suppliers, such as Brunei, Malaysia, Vietnam, or Russia. Brazil, on the other hand, is negotiating with Indonesia, says the IFPRI.
Jorge Moreira da Silva, from the UN working group on fertilizer passage, advocates for an agreement among conflict stakeholders allowing the passage of five ships loaded with fertilizers and related raw materials per day. However, “even if the war were to stop now, there is inertia,” laments David Laborde. “A number of actors have waited to place new fertilizer orders. Everyone will come to the market at the same time, contributing to further price increases.”
And two uncertainties will remain: “To what extent have fertilizer production capacities been affected by the strikes? And if we need to make up for three months of no production, how will we send the fertilizers to their destination? We don’t have three times more boats.”
