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A near shutdown of shipping in the Strait of Hormuz is fuelling fears of a wider food crisis, as rising fertiliser costs begin to hit farmers across import-dependent countries. Escalating disruptions are placing unprecedented pressure on the global food system, raising urgent concerns about food security, the United Nations Conference on Trade and Development (UNCTAD) has warned in a rapid assessment.
Shipping through the route has collapsed, with transits down by more than 95 per cent, disrupting energy and fertiliser flows. The region is central to global fertiliser supply, both as a producer and as a key trade corridor.
The impact of the war on energy markets was now feeding through to fertiliser supply chains, threatening agricultural production across some of the world’s most import-dependent and economically vulnerable nations, the report outlined.
Countries in the region account for 13 per cent of global exports of nitrogen and 9 per cent of phosphate fertiliser nutrients, according to UNCTAD estimates.
For large agricultural economies such as India, these disruptions carry direct and immediate implications.
India is one of the world’s largest food producers and fertiliser consumers. It is also the second-largest importer of fertilisers by both volume and value, leaving it particularly exposed to supply shocks in the Gulf.
Rising natural gas prices, a key input in nitrogen-based fertilisers, have already constrained production capacity, pushing fertiliser prices upward. For farmers, especially in developing economies, this can influence planting decisions, including crop choice and total area planted and leads to reduced application rates and lower crop yields, amplifying the risk of food shortages.
These pressures could have knock-on effects across food systems, especially in countries already facing economic stress, the report warned.
In India’s case, the vulnerability is reflected in a persistent gap between domestic production and demand. In 2024-25, domestic fertiliser production stood at about 465.45 lakh metric tonnes (lmt), including 306.67 lmt of urea, 111.22 lmt of NPKS (which carries a mixture of plant macronutrients nitrogen, phosphorus, potassium and sulphur), and 37.69 lmt of di-ammonium phosphate or DAP, according to data from the Union Ministry of Chemicals and Fertilisers.
This was against a total requirement of around 649.43 lmt. Urea accounted for the largest share of demand at 364.01 lmt, followed by 151.29 lmt of NPKS, 111.92 lmt of DAP, and 22.21 lmt of MOP.
The shortfall was met through imports, which stood at 160.29 lmt in 2024-25, underlining India’s continued dependence on global markets.
Of total urea imports of 56.47 lmt, about 70 per cent came from Gulf countries, including Oman, Saudi Arabia, Qatar and the United Arab Emirates. Similarly, 42 per cent of DAP imports came from Saudi Arabia, along with a further 15 per cent of NPK fertilisers.
At the same time, higher freight costs and longer shipping routes were compounding supply chain pressures. Disruptions in key maritime corridors were not only delaying deliveries but also increasing the cost of essential commodities, further straining food systems already under stress.
Freight rates for oil tankers have risen by more than 90 per cent since late February, it said. Bunker fuel prices have nearly doubled, while war risk insurance premiums have surged, with some insurers withdrawing coverage altogether for vessels operating in the Persian Gulf.
“As a result, shipowners are being forced either to suspend transits or absorb sharply higher insurance costs, with premiums rising several times over for each voyage. These higher transport and insurance costs are feeding through to fertiliser prices and, in turn, to agricultural production and exports,” it said.
UNCTAD warned that these overlapping shocks, spanning energy, fertilisers and transport, were reinforcing one another, creating a feedback loop that could deepen global food insecurity. Countries heavily reliant on imports for both food and agricultural inputs were likely to face the most acute impacts.