Middle East Conflict Drives Surge in Fertiliser Costs Threatening Global Food Security and Trade Stability

Unctad reports that Middle East conflict and rising gas prices are driving up fertiliser costs, threatening global agricultural yields and food trade.

By: AXL Media

Published: Mar 31, 2026, 5:20 AM EDT

Source: The information in this article was sourced from Engineering News

Geopolitical Instability Disrupts Vital Global Trade Arteries

The intensification of hostilities in the Middle East, particularly affecting the Strait of Hormuz, has sent shockwaves through the global agricultural supply chain. This region serves as a critical maritime corridor, facilitating approximately one third of the world’s seaborne fertiliser trade. According to UN Trade and Development (Unctad), the instability is not merely a regional concern but a systemic threat to international commerce. The link between maritime security and agricultural viability is becoming increasingly clear as shipping disruptions lead to higher insurance premiums and diverted trade routes.

The Critical Correlation Between Natural Gas and Food Production

Energy markets have reacted sharply to the ongoing conflict, with natural gas prices nearly doubling in parts of Asia and seeing similar spikes across Europe. This surge is particularly damaging to the agricultural sector because natural gas is the foundational ingredient for nitrogen based fertilisers like urea and ammonia. As production costs for these essential inputs climb, the financial burden is passed directly to farmers. Historical data suggests that whenever energy prices experience such volatility, a corresponding spike in fertiliser costs follows, creating a lag effect that can destabilize planting seasons.

Developing Nations Face Compounded Economic Pressures

While high input costs affect global markets, the impact is disproportionately severe for developing economies already struggling with structural financial constraints. Many of these nations are grappling with high debt levels and limited fiscal flexibility, making it nearly impossible to subsidize agricultural inputs for local producers. In countries such as Somalia, Tanzania, and Sudan, the reliance on fertiliser imports from the Gulf region is exceptionally high. Without the capital to absorb price increases or the infrastructure to secure alternative sources, these regions face a direct threat to their staple food production.