Global Fertilizer Supply Chain Faces a “System Shock” as March Price Surge Threatens Spring Planting

By iHumate | March 31, 2026

Strait of Hormuz

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Russia pauses ammonium nitrate exports

In March 2026, global fertilizer markets entered a sharp shock. Russia, a key supplier controlling about 40% of international ammonium nitrate trade, suspended ammonium nitrate exports until April 21 to prioritize domestic spring planting. Export licenses were frozen, cutting an important nitrogen source for major importing markets including Brazil, India and Peru.

Hormuz: the fertilizer chokepoint

Russia’s restriction was the direct shock. The U.S.-Iran conflict and resulting shipping risk around the Strait of Hormuz created the deeper structural threat. FAO Chief Economist Maximo Torero warned that nearly 30% of global fertilizer trade moves through Hormuz, while almost half of global sulfur, a key phosphate raw material, is produced in the Persian Gulf. If sulfur flows are interrupted, phosphate production could stall. In the first week of March, Middle East urea prices jumped 19%, while Egypt rose 28%.

FAO projected that, if the crisis persists, global fertilizer prices could rise by an average of 15% to 20% in the first half of 2026. ICIS analysts also warned that the global urea supply chain lacks diversification and is exposed to a single chokepoint risk.

Shipping moves into wartime pricing

The freight market has shifted toward wartime pricing. Reported war-risk premiums for vessels passing conflict zones rose from 0.25% to as high as 10%, while insurers began reassessing premiums weekly. These costs flow into landed fertilizer prices, especially pressuring price-sensitive importers in sub-Saharan Africa and Southeast Asia.

Yield risk if fertilizer is not applied

FAO’s assessment indicates that if fertilizer shortages last more than three months, global agriculture could face nonlinear yield losses. Key risks include:

  • Yield collapse: missed fertilizer during critical growth stages can cut yields by more than the proportional reduction in fertilizer use.
  • Crop switching: farmers may reduce wheat and corn acreage and move toward lower-fertilizer crops such as soybeans.
  • Food-to-fuel pressure: higher oil prices can lift biofuel demand, diverting more corn to ethanol instead of food use.

Policy focus: U.S. bills and CBAM relief

Policy responses are also moving. U.S. senators including Klobuchar and Thune introduced fertilizer-market bills aimed at mandatory price reporting and expanded domestic fertilizer capacity and storage through loans and grants. In Europe, targeted CBAM tariff relief in early 2026 sought to lower the cost of imported ammonia and urea and ease farmer pressure.

China exports help absorb volatility

China’s March export data drew market attention. From January to March 2026, China exported 8.16 million tonnes of fertilizers, up 14.1% year on year. Ammonium sulfate exports reached 1.7118 million tonnes in March, ranking first among fertilizer export categories. Stable Chinese exports helped moderate the global price shock.

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