What the Data Shows Now
There is a sequence to how a supply shock becomes a food crisis, and the world is currently in the middle stages of it. The Strait of Hormuz carries roughly one-third of global seaborne fertilizer trade — approximately 16 million tons annually. Since the conflict escalated and tanker traffic through the strait collapsed, the global fertilizer market has been tightening in ways that will not show up fully in harvest outcomes until later in 2026 and into 2027.
What is already visible in the data is alarming. The World Bank confirmed this week that global fertilizer prices have risen 35% in the first five months of 2026 compared to the same period last year. Urea prices surged 53.7% in March to USD 725.6 per metric ton — the highest level in four years. The World Bank's Commodity Markets Outlook projects that fertilizer prices will rise by an average of 31% across the full year, reaching their worst affordability levels since 2022. DAP prices are forecast to climb 6%, and MOP prices to increase 12%.
The mechanism is straightforward even if the consequences are not. Natural gas is the primary feedstock for nitrogen fertilizers. Qatar, which handles the bulk of Gulf LNG exports, has not dispatched a vessel since the July 7 strike on its Al Rekayyat facility. The resulting tightness in LNG markets feeds directly into ammonia production costs, which feed directly into urea and other nitrogen fertilizer prices. When energy supply through the Strait is disrupted, fertilizer production costs rise within weeks, but the agricultural impact arrives six to nine months later — after the planting season closes with lower application rates and reduced soil nutrition.
The Mechanism: Gas to Fertilizer to Food
The World Food Programme has estimated that the conflict could push 45 million additional people into acute hunger. Sub-Saharan Africa, which imports the majority of its fertilizer and has the least financial capacity to absorb price spikes, faces the greatest risk. West and Central Africa are already experiencing what the World Bank's May update describes as a lean season crisis, with acute food insecurity expected to peak between June and August 2026.
The wheat price dynamic adds another layer of complexity. Wheat prices on global markets have risen 13% since March. An emerging El Niño — with a 61 to 87% probability of developing by mid-2026 — poses a further medium-term risk to crop production in South Asia, Southern Africa, and Australia, potentially reducing rice output by 20 to 50% in affected regions. The compounding of a conflict-driven fertilizer shock with a climate-driven production shock represents precisely the kind of scenario that global food security systems were not designed to absorb simultaneously.
For agricultural input companies, the pricing environment is extraordinary by historical standards. The World Bank noted that "if these risks materialise, the average urea price in 2026 could exceed the average of USD 700 per ton recorded in 2022, marking its second-highest real level since 1974." That is not a fringe scenario — it is the direction of travel given current supply conditions.
Regions Most at Risk
For food manufacturers and consumer goods businesses that use grain, oilseed, and processed agricultural inputs in their supply chains, the cost pressure building in the second half of 2026 will be unlike anything seen since the Russia-Ukraine shock of 2022. The difference this time is that strategic inventories in several regions are lower than they were in 2022, and the geopolitical path to a rapid resolution is significantly less clear.
The international community's response has been notable for its scale and its limitations. The IMF, World Bank Group, and World Food Programme issued a joint statement describing the situation as a serious threat to global development. But the tools available to humanitarian institutions for managing a fertilizer supply crisis — emergency food aid, strategic grain releases, logistics support — address the symptoms rather than the supply chain dysfunction that is driving prices higher.
The Strait of Hormuz fertilizer disruption began several months ago. The fertilizer application season it has disrupted is largely over. The harvest that reflects that disruption is months away. The food price index will start to reflect it after that. The hunger statistics will lag further still. The world is at an early stage of a supply shock that has barely begun to materialise in the metrics that drive government and humanitarian response.
The Timeline of the Crisis
The international community's response has been notable for its scale and its limitations. The IMF, World Bank Group, and World Food Programme issued a joint statement describing the situation as a serious threat to global development. But the tools available to humanitarian institutions for managing a fertilizer supply crisis address the symptoms rather than the underlying supply chain dysfunction. Emergency food aid and strategic grain releases do not rebuild disrupted fertilizer logistics. The world is at an early stage of a supply shock that has barely begun to materialise in the metrics that drive government and humanitarian response. The planting season disruption is recorded. The harvest gap is months away. The hunger peak will follow after that.
For agricultural commodity traders and food manufacturers, the forward curve for fertilizer prices through the rest of 2026 suggests that input cost pressure will remain elevated even if the immediate crisis moderates. The World Bank's projection of a 31% average increase for the full year reflects both the sharp March spike and the expectation that prices will remain above pre-conflict levels even as some production returns. The markets most exposed to sustained high prices are those with the highest proportion of nitrogen-intensive crops — corn, wheat, and cotton — and the least financial capacity to absorb input cost increases through to the consumer.
The El Niño development risk adds a climate overlay to an already stressed supply picture. A 61 to 87% probability of El Niño development by mid-2026, according to climate monitoring agencies, implies a meaningful probability of reduced rice and wheat production in South Asia and Southern Africa at precisely the moment when those regions are most vulnerable to import cost increases driven by the fertilizer and energy price environment.
For investors and businesses in the agricultural input sector, the current environment represents an extraordinary pricing opportunity for producers of phosphate and potash — nutrients that are not dependent on Gulf gas feedstocks and whose prices are rising in sympathy with the nitrogen market even without the direct supply chain disruption. Canada's potash producers, which the World Bank identifies as representing the most significant medium-term addition to global supply capacity, are well positioned in this environment.