HANOI, Vietnam (AP) — Farmers around the world are feeling the squeeze of the Iran war. Gas prices have shot up and fertilizer supplies are waning due to Tehran's near shutdown of the Strait of Hormuz in retaliation for U.S. and Israeli bombing.
The fertilizer shortage is putting the livelihood of farmers in developing countries — already troubled by — further at risk, and could lead to people everywhere .
The poorest farmers in the Northern Hemisphere rely on , and the shortage comes just as planting season begins, said Carl Skau, deputy executive director of the World Food Program.
“In the worst case, this means lower yields and crop failures next season. In the best case, higher input costs will be included in food prices next year.â€
Baldev Singh, a 55-year-old rice farmer in Punjab, India, says smallholders — the bulk of the country's farmers — may not survive if the government cannot subsidize fertilizers when demand peaks in June.
“Right now, we are waiting and hoping,†he said.
The war halts supplies of key nutrients
Iran is seriously limiting shipments through a narrow passage that usually handles about and nearly a third of global fertilizer trade.
On Friday Iranian ambassador to the United Nations in Geneva Ali Bahreini said Tehran has accepted a request from the U.N to let humanitarian aid and move through the critical waterway, even as it endured strikes on its nuclear facilities.
The aid plan would be the first breakthrough at the shipping chokepoint after a month of war. While markets and governments have largely focused on blocked supplies of oil and natural gas, the restriction of threatens farming and food security around the world.
Nitrogen and phosphate — two major fertilizer nutrients — are under immediate threat from the blockade.
Supplies of nitrogen including urea, the most widely traded fertilizer that helps plants grow and boosts yields, are the hardest hit because of shipping delays and the soaring price of — an essential ingredient.
The conflict has restricted about 30% of global urea trade, said Chris Lawson of CRU Group, a London-based commodities consultancy.
Some countries are already facing critical shortages, according to Raj Patel, a food systems economist at the University of Texas. For example, Ethiopia gets over 90% of its nitrogen fertilizer from the Gulf through Djibouti, a supply route that was strained even before the war began in February.
“The planting season is now,†Patel said. “The fertilizer isn’t there.â€
Phosphate supplies, which support root development, are also under pressure. Saudi Arabia produces about a fifth of the world’s phosphate fertilizer, and the region exports more than 40% of the world's sulfur, a key ingredient and byproduct of oil and gas refining, Lawson said.
Even after the war ends, producers in the Gulf would need clear security guarantees before resuming shipments through the strait, and insurance costs would almost certainly rise, said Owen Gooch, an analyst with London-based Argus Consulting Services.
In India, the government has prioritized urea supplies for domestic use and provides fertilizer manufacturers with about 70% of their natural gas needs. Some plants are still running below capacity, leading to lower output.
“The food system is fragile, and it depends on stable fertilizer supply chains to ensure farmers can produce the food the world relies on,†said Hanna Opsahl-Ben Ammar of Yara International, one of the world’s largest fertilizer companies.
Shortages hit at a critical time
Fertilizers are generally applied just before or at planting, so crops miss key early growth stages and yields can fall when deliveries are delayed, even if supplies improve later.
The impact is already being felt in the and Europe, where the main planting season is underway, and it is expected to hit the first planting season in much of Asia in the coming months.
“Our crops out in the field need nitrogen now — the sooner the better — so they can get off to a good start, helping them establish themselves and build up reserves for the harvest later this summer,†said Dirk Peters, an agricultural engineer who runs a farm outside Berlin.
Fertilizer prices are below the peaks seen after , but grain prices were higher then, helping farmers absorb the costs, said Joseph Glauber of the International Food Policy Research Institute. Grain prices are lower now meaning margins are tighter and farmers may have to switch to less fertilizer-intensive crops — such as soybeans in the U.S. — or apply less fertilizer, reducing yields. Lower yields can lead to higher consumer prices.
Other nations likely won't make up the shortfall. China, the world’s largest producer of nitrogen and phosphate fertilizers, is prioritizing domestic supply, and urea shipments probably won't resume until May, Lawson said. Plants in Russia, another major producer, are already running near full capacity, he said.
Developing nations are vulnerable
The disruptions are already being felt across Africa, where many farmers rely on fertilizer imported from the Middle East and Russia.
have left farmers with about a week of dry weather to prepare fields and apply fertilizer, said Stephen Muchiri, a Kenya maize farmer and CEO of the Eastern African Farmers Federation, which represents 25 million smallholders.
Fertilizer shortages and price hikes hit farmers hard, forcing them to use less and leading to reduced yields. Even short delays can reduce maize yields by about 4% in a season, Patel said, citing research from Zambia.
Governments can intervene by applying subsidies, promoting domestic production and controlling exports.
India already subsidizes fertilizer to ease the financial strain on farmers, but those subsidies leave less money for long-term farming investments. It has budgeted $12.7 billion this year for urea subsidies alone, according to the U.S.-based Institute for Energy Economics and Financial Analysis.
Efforts to produce domestic urea have increased India's dependence on imported gas, and excessive urea use has harmed local soil, said Purva Jain of IEEFA, who supports the use of organic fertilizers.
Less reliance on imported fertilizers could protect farmers and consumers from energy price swings and climate shocks, said Oliver Oliveros, executive coordinator of the Agroecology Coalition.
“This could be a turning point,†he said.
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Olingo reported from Nairobi, Kenya. Associated Press writer Jamey Keaten in Geneva and Kerstin Sopke in Berlin contributed.
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