Trade has proved resilient to disruption in the Gulf, but higher prices are exposing the divide between countries that can protect their farmers and those that cannot. The next planting seasons will test how much that divide costs in food production.
Davie Wasi could not afford a full bag of fertiliser last season. The smallholder in southern Malawi bought it by the bucket instead. This year, with a 50kg bag costing as much as 205,000 kwacha, against about K150,000 previously, he plans to rely on organic manure.
“If I struggled to buy fertiliser” at last year’s price, he told Malawi’s Nation, “what more this time around?”
His decision captures a weakness in the apparent recovery of the global fertiliser market. Trade has adjusted to the disruption of Gulf supplies more successfully than many feared. Farmers’ finances have not necessarily recovered with it.
Gulf-origin urea imports fell about 85 per cent following the disruption of the Strait of Hormuz, yet total global fertiliser imports declined only about 6 per cent. Egypt and Nigeria increased exports, while Russia, China and the US gained market share.
That adjustment helped avert the scale of physical shortage initially feared. But urea prices were still about 70 per cent higher year on year during the second quarter. Replacing a missing cargo does not ensure that the farmers it eventually supplies can afford its contents.
The next test will come in the fields: whether growers buy less fertiliser, cultivate less land or accept lower yields. The answer will depend partly on rainfall and crop prices, but also on which governments can afford to absorb the shock.
The squeeze between costs and returns
Before the war, the Gulf accounted for roughly 43 per cent of global urea exports and 44 per cent of sulphur exports. About 39mn tonnes of fertiliser and feedstocks passed through Hormuz in 2024, according to research by Shawn Arita and Sandro Steinbach.
Alternative suppliers have eased that dependence. They have not removed the deterioration in farm economics.
Arita and Steinbach found that, by April, urea prices had risen about 40 per cent from their earlier level, while wheat and maize had gained only about 6 per cent, soybeans less than 3 per cent and rice had fallen. Unlike the shock following Russia’s invasion of Ukraine, when grain and fertiliser prices rose together, this increase in input costs has brought farmers little compensating improvement in crop revenues.
The pressure can persist after international prices retreat. A weaker currency makes imports more expensive in local money; costly credit restricts purchases; and fertiliser bought at peak prices can remain in the distribution system.
For a farmer deciding whether another bag will pay for itself, the relevant measure is the cost relative to the expected value of the harvest. For one without savings or credit, even a potentially profitable purchase may be unaffordable.
Malawi’s widening subsidy divide
Malawi is approaching its main rain-fed planting season, with substantial rains generally beginning in late October or November. It is also sharply reducing direct access to subsidised mineral fertiliser.
About 610,931 smallholders are due to receive it under the redesigned Farm Inputs Subsidy Programme, compared with roughly 1.1mn beneficiaries previously. The budget has fallen from about K241bn to K111bn, according to Nation reporting. A larger group is intended to receive support through locally produced organic fertiliser.
For farmers seeking mineral fertiliser, eligibility makes an enormous difference. A beneficiary contributes about K20,000 towards each subsidised 50kg bag. Commercial prices range from K180,000 to K205,000. Two bags can therefore cost K40,000 through the programme or as much as K410,000 outside it.
Wasi’s response is to stop buying commercial mineral fertiliser. Another smallholder, Joseph Banda, faces a choice between selling some of his previous maize harvest to buy inputs and keeping it to feed his family.
These accounts establish that affordability is already changing some farmers’ decisions. They do not establish the scale of any eventual national production loss. Rainfall, assistance and the availability and effectiveness of organic substitutes will also matter.
Earlier experimental evidence nevertheless helps explain the constraint. In an IFPRI study in Malawi, more sophisticated, soil-specific advice did not measurably increase fertiliser use or maize yields. A $100 fertiliser voucher did, raising yields by about a fifth.
For those farmers, purchasing power mattered more than additional advice. Malawi now confronts that constraint while in debt distress and short of foreign exchange, limiting the government’s ability to extend protection.
India pays to contain the shock
India shows how government intervention can alter the transmission of international prices.
For the 2026 Kharif season, it increased the subsidy budget for phosphatic and potassic fertilisers to about Rs415bn, roughly Rs43bn above the previous year. The farmer price of DAP, a widely used phosphate fertiliser, remained at Rs1,350 per 50kg bag.
Official figures also showed supplies above assessed requirements. By July 19, urea availability stood at about 16.38mn tonnes against a requirement of 10.94mn tonnes. DAP availability was about 3.95mn tonnes against 3.16mn tonnes required.
These national totals cannot demonstrate that every farmer received the right fertiliser on time. Nor do weaker sales during parts of the monsoon establish an affordability crisis: rainfall and the timing of applications complicate the picture.
But the evidence does not show widespread abandonment of fertiliser because farmers could no longer pay international prices. The state absorbed much of the increase.
India is not a controlled comparison with Malawi. Their agricultural systems, domestic industries and public finances differ substantially. It nevertheless illustrates the importance of fiscal capacity, stocks and procurement: a global price shock need not reach farmers in full. Shielding them transfers part of the cost to the public budget.
Pakistan’s wheat-season test
Pakistan occupies an intermediate position. Domestic production supplies much of its urea, offering some insulation from international nitrogen prices. Phosphate fertilisers are more exposed.
For the week ending September 10, Pakistan Bureau of Statistics figures put a 50kg bag of Sona urea at about Rs4,701, roughly 7 per cent above a year earlier. DAP cost Rs16,883, almost 23 per cent more, while single super phosphate was over 40 per cent dearer.
The divergence matters ahead of the Rabi wheat season, when phosphate is normally applied around sowing.
Purchasing data are less conclusive. July DAP offtake fell 9.9 per cent year on year and phosphate nutrient consumption declined 22.7 per cent. But August DAP sales recovered to about 123,000 tonnes, leaving cumulative sales for the first eight months roughly flat to slightly higher than in 2025. Urea sales were essentially unchanged over that period.
Heavy monsoon rains delayed applications. Some apparent weakness therefore reflected timing rather than a lasting reduction in use.
The coming wheat season will provide a clearer test. Federal and provincial officials have repeatedly discussed DAP prices and availability ahead of planting. The government says physical supplies are adequate; affordability remains a concern.
Evidence from Kenya shows what can happen when protection is uneven. At the Mwea irrigation scheme, representatives of more than 10,000 rice growers say farmers have largely missed out on subsidised fertiliser. Commercial bags cost more than Sh6,000, against subsidised prices of about Sh2,000 to Sh2,500. Some growers have consequently reduced acreage or fertiliser applications, according to reporting by Citizen Digital.
Brazil shows a similar financial pressure in commercial agriculture. Fertiliser deliveries fell 5.4 per cent year on year in the first half of 2026. Its fertiliser association cited worsening crop-to-fertiliser exchange ratios, expensive credit and climatic uncertainty alongside geopolitical disruption, while saying agricultural demand had been met.
Lower deliveries alone do not establish reduced application or future crop losses. They do show why adequate supply is an incomplete measure of agricultural resilience.
The harvest will deliver the verdict
The trade recovery itself remains vulnerable. Kpler data reported by Reuters showed only four commodity vessels transiting Hormuz on September 14, against a pre-war daily average of roughly 125.
Those figures cover commodity shipping generally and cannot establish a renewed fertiliser shortage. They do underline the continuing risk to a market whose adjustment is still being tested.
The more immediate agricultural question is what happens to supplies already available. In India, public spending has cushioned farmers. In Pakistan, phosphate prices will test purchasing power ahead of wheat planting. In Malawi, reduced direct subsidy coverage leaves more growers facing commercial prices they may be unable to pay.
The consequences will emerge unevenly and with a lag. Purchases can be postponed; some nutrient applications cannot be delayed without sacrificing their benefit to the crop.
The next evidence to watch is therefore not simply tonnes unloaded at ports, but bags bought, nutrients applied and hectares planted. Trade has demonstrated its capacity to find alternative suppliers. The coming harvests will show which farmers could afford to use them.
| Source | What it supports | Link |
|---|---|---|
| World Trade Organization | Gulf dependence, fertiliser trade exposure and movements in global urea and phosphate prices following the Hormuz disruption. | WTO analysis |
| AMIS — Agricultural Market Information System | Evidence that the fertiliser crisis increasingly became a price and affordability shock rather than simply a physical shortage. | AMIS |
| IFPRI | Malawi modelling showing sharply higher fertiliser costs for the coming season and the potential effects on agricultural output. | IFPRI Malawi analysis |
| The Nation — Malawi | Field reporting on Malawian farmers rationing fertiliser, buying it in small quantities and considering reliance on manure because of high prices. | Malawi field report |
| The Nation — Malawi | Details of Malawi’s redesigned Farm Inputs Subsidy Programme, including reduced beneficiary numbers and the programme’s fertiliser allocation. | FISP reforms |
| Government of India — Press Information Bureau | Indian fertiliser subsidy policy and the government’s decision to shield farmers from much of the international price increase. | India subsidy data |
| Government of India — Press Information Bureau | Official figures showing fertiliser availability exceeding assessed Kharif requirements for urea, DAP, potash and compound fertilisers. | India availability data |
| Pakistan Bureau of Statistics | Official September 2026 retail prices for urea, DAP, SSP, potash and other fertilisers, showing the particularly sharp rise in phosphate prices. | Pakistan fertiliser prices |
| Citizen Digital — Kenya | Direct farmer testimony from Mwea that high commercial fertiliser prices have caused some growers to reduce acreage or apply less fertiliser. | Mwea farmer report |
| Reuters | Latest evidence of renewed disruption to commodity shipping through the Strait of Hormuz, highlighting the fragility of the supply recovery. | Hormuz shipping report |