A prolonged conflict between the US–Israel axis and Iran could significantly disrupt the global fertiliser market, with India emerging as one of the most vulnerable countries. Analysts warn that supply disruptions, rising prices, and logistical bottlenecks could directly impact India’s fertiliser availability at a critical time for its agricultural cycle.
India Faces Immediate Supply Risk
According to research agency BMI, a unit of Fitch Solutions, India currently faces the most immediate risk among major agricultural markets. The timing of the disruption is particularly sensitive because India’s fertiliser demand window is rapidly approaching. “India faces the most imminent risk,” BMI noted in its assessment. The agency pointed out that although the current disruptions fall outside the peak import period for several global markets, India’s fertiliser demand typically rises sharply from late March through April, with the peak phosphate production season beginning in June. Consequently, any sustained disruption during this period could tighten supplies and put pressure on fertiliser prices and availability.
Production Disruptions in Key Regions
The conflict has already triggered disruptions in natural gas supplies across several regions that depend heavily on Gulf energy exports. Natural gas serves as a crucial feedstock for producing ammonia and urea, the key ingredients for nitrogen-based fertilisers.
According to analysts Noah Gordon and Lucy Corthell from the Carnegie Endowment for International Peace, fertiliser producers across South Asia have already started facing operational challenges. “Deprived of their natural gas supplies from Qatar, fertiliser firms in India, Bangladesh and Pakistan have had to shut down production,” they said.
Meanwhile, Egypt – another major fertiliser producer – has also been affected. The country lost its gas imports from Israel and has been forced to turn to the international liquefied natural gas (LNG) market, where prices have surged amid supply uncertainties. India, however, described the shutdowns at some fertiliser plants as planned maintenance closures, which had reportedly been announced a month earlier due to shortages of LPG.
Strait of Hormuz Disruptions Add Pressure
The ongoing conflict has also disrupted shipments of crude oil, natural gas, and fertilisers passing through the Strait of Hormuz, a critical global energy corridor. The narrow waterway handles nearly thirty percent of global fertiliser and feedstock shipments, making it vital for global agricultural supply chains. Any restrictions or blockages in this route could significantly reduce the availability of key fertiliser inputs.
The closure of the Strait has effectively constrained Gulf natural gas production, which is the primary feedstock used to manufacture ammonia and urea. Investment firm Viewpoint Investment Partners highlighted the seriousness of the situation. “With no strategic fertiliser reserves and no pipeline bypass for ammonia, urea prices are skyrocketing just as the Northern Hemisphere enters its spring planting window,” the firm noted.
Rising Prices Across Fertiliser Markets
The global fertiliser market has already started witnessing price volatility. Analysts from the Carnegie Endowment reported that benchmark urea prices have risen by nearly thirty percent over the past month. However, the disruption is not limited to nitrogen-based fertilisers alone. Phosphorus-based fertilisers are also under pressure. Gulf countries play a significant role in this segment as well. The region produces around twenty percent of global phosphate fertilisers and nearly 25 per cent of the world’s sulphur supply, which is primarily a byproduct of oil and gas production. Sulphur is essential for producing sulphuric acid, a key component used to convert phosphate rock into plant-absorbable fertiliser forms. Therefore, disruptions in oil and gas production in the Gulf could indirectly affect phosphate fertiliser availability worldwide.
Risk of Reduced Fertiliser Usage
If the conflict extends beyond a month, analysts believe farmers may begin reducing fertiliser application rates due to supply shortages and rising costs. BMI warned that such a development could have serious consequences for agricultural productivity. “Should the conflict extend beyond one month, we anticipate reduced fertiliser application rates,” the agency said. Lower fertiliser usage could significantly affect crop yields, especially if adverse climatic conditions also emerge simultaneously.
India’s Large Share in Global Fertiliser Consumption
India’s exposure to fertiliser market disruptions is amplified by its substantial role in global fertiliser consumption. BMI estimates that India accounts for nearly 15 per cent of global fertiliser use and represents around 80 per cent of fertiliser consumption in South Asia. As reported by thehindubusinessline.com, any prolonged supply disruption or price spike could have far-reaching implications not only for India’s agricultural output but also for regional food security and global fertiliser markets.
