Fertiliser Costs Stay High As Hormuz Conflict Drags Into Ninth Month
30 October 2026, New Delhi: Global fertiliser prices remain stuck well above pre-crisis levels as the conflict around the Strait of Hormuz, now in its ninth month, continues to disrupt the Gulf region’s gas and fertiliser trade. US retail data released in mid-October show anhydrous ammonia and urea both higher than a month earlier and sharply higher than a year ago, even after a brief price retreat earlier in 2026, and India has had to extend emergency subsidy support to keep phosphate affordable through its current planting season.
The conflict, which research trackers date to late February 2026, closed the Strait of Hormuz to most commercial shipping for weeks and has kept traffic well below normal ever since, despite a fragile ceasefire framework. The Gulf supplies roughly a third of the world’s urea exports and a large share of the sulphur used to make phosphate fertiliser, so the disruption hit nitrogen and phosphate markets hard. International urea prices roughly doubled within weeks of the strait’s closure, according to analysis published by the International Food Policy Research Institute (IFPRI), a CGIAR-affiliated research body, and about 3.9 million tonnes of annual Gulf urea exports were suspended at the peak.
A fragile truce has not reopened the waterway
The two sides reached a 14-point memorandum of understanding on June 17, 2026, covering a ceasefire and a path to reopening the strait, and prices did fall sharply through the early summer as Chinese urea exports resumed and buyers who had rushed to purchase earlier held back. By early June, industry pricing cited by Indian trade outlets put international urea near $650 a tonne and DAP near $890, down from the spring’s peak.
That relief did not hold. Fresh violence has repeatedly interrupted shipping since the June truce, and talks on the harder issues, including sanctions and nuclear inspections, have stalled. On October 18, Iran’s Revolutionary Guard reported that two oil tankers, each carrying about two million barrels of crude, caught fire after striking mines in the strait, with Iranian state media saying the vessels had switched off their tracking systems and used an unauthorised route. A Revolutionary Guard naval commander warned that ships running without navigation systems would be treated as hostile. US President Donald Trump said this month he was not considering ground troops or nuclear weapons against Iran and expected a resolution only after the November 3 US midterm elections, suggesting the standoff will not end quickly.
Against that backdrop, DTN’s US retail fertiliser survey for the second week of October showed anhydrous ammonia up 5% from a month earlier to $987 a ton and up 18% from a year ago. Urea rose modestly month on month to $674 a ton, up 13% year on year, while potash, MAP and DAP also showed year-on-year gains between 2% and 5%. S&P Global Ratings noted that supply chain disruption tied to the Hormuz conflict remains evident in the data.
India’s subsidy bill keeps growing
Few importers are more exposed than India, the world’s largest buyer of DAP. India’s price controls cap retail DAP at 1,350 rupees per 50-kilogram bag under the Nutrient Based Subsidy scheme, but recent import deals have been struck in the mid-$910s to high-$920s a tonne on a cost-and-freight basis, nearly double the roughly $510-a-tonne level at which importers break even under that capped price. To keep supply flowing into the rabi season, which runs from October to March and accounts for roughly half of India’s annual grain output, New Delhi has extended a special payment of 3,500 rupees (about $41) per tonne to importers and domestic producers, covering port handling, bagging, transport and dealer margins, and compensating importers for swings in international prices during the season.
The Philippines offers a preview of the knock-on risk for other import-dependent farm economies. It buys roughly 90% of its fertiliser from abroad, and analysts there have already warned that elevated fertiliser costs could push cash-strapped farmers to cut application rates, lowering yields in a country also bracing for an El Niño-linked drought. IFPRI’s analysis similarly flags Sub-Saharan Africa, where about a third of fertiliser supply comes from the Gulf, and Brazil, which saw local fertiliser prices jump more than 35% in the first two weeks of the conflict despite importing almost none of its own gas from the region.
For India and other large importers, the practical effect is a widening subsidy bill and a squeeze on the margins of input retailers and distributors who must manage price volatility between the time they book cargo and the time it reaches farmers’ fields. Agrochemical and fertiliser companies serving South Asia and Latin America should expect continued volatility in landed costs through at least early 2027, since consumer price effects from fertiliser shocks typically take three to six months to show up and can persist well beyond that.
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