Due to the on-going war happening between Iran and the United States, shortages of fertilizer have become a growing concern for developing countries. Other concerns include the rise in oil and gas prices, however, those issues are likely to be short-lived.
Executive director of the International Trade Centre (ITC), Pamela Coke-Hamiliton, says the more prevalent issue is the shortage in fertilizer, “because that then affects food security and food security is always the basis for stability.” Oil and gas could be secured from other places, an explanation for why their situation wasn’t as ‘dire,’ despite the rises in both oil and gas prices.
The shortage came just as planting seasons began and farmers from all over the globe are struggling. Along with the shortages in fertilizer, farmers are also experiencing rises in temperature and erratic weather conditions, which could potentially lead people to paying more for food.
Carl Skau, deputy executive director of the World Food Program states, “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.”
Baldev Singh, a 55-year old rice farmer in Punjab, India, shares his concerns with the media, “the bulk of the country’s farmers – may not survive if the government cannot subsidize fertilizers when demand peaks in June.”
Iran is seriously limiting shipments through the Strait of Hormuz, a narrow passage that usually handles about a fifth of the world’s oil shipments and nearly a third of global fertilizer trade. The restriction of fertilizer threatens farming and food securing for everyone all around the world. Nitrogen and phosphate – two major fertilizer nutrients are under immediate threat from the restrictions.
Supplies of nitrogen including urea, the most widely traded fertilizer that helps plants grow and boost yields, are hit the hardest because of shipping delays and the rise in price of liquefied natural gas — an essential ingredient in fertilizer. According to Chris Lawson of CRU Group, a London-based commodities consultancy, about 30% of global urea trade has been restricted.
Some countries are experiencing critical shortages, such as Ethiopia, which gets over 90% of its nitrogen fertilizer from the Gulf through Djibouti, a supply route that was already blocked before the war began.
Supplies of phosphate have also been restricted. Saudi Arabia exports about a fifth of the world’s phosphate fertilizer, which also exports more than 40% of the world’s sulfur, a key ingredient and byproduct of oil and gas refining.
Fertilizer should generally be applied just before or at planting, so when this is delayed, crops’ growth stages and yields get affected. The impact from shortages in fertilizer has already been felt in the United States and Europe, and is expected to hit Asia in the first planting season.
Farmers may have to switch to less fertilizer-intensive crops, such as soybeans, or opt to apply less fertilizer, which reduces yields. Lower yields may lead to higher consumer prices and may lead to lower-quality harvests, directly increasing global food security and hunger. At the moment, farmers could only wait and hope.
