In early April 2026, the international fertilizer market experienced significant volatility. Conflicts in the Middle East triggered a shipping crisis in the Strait of Hormuz, China's continued tightening of export controls. Global fertilizer prices soared, supply gaps widened, and various countries took countermeasures to ensure agricultural production.
I. Middle East Shipping Crisis: The Global Fertilizer Supply Chain's "Main Artery" Disrupted
The Strait of Hormuz, a crucial passage for approximately one-third of global seaborne fertilizer trade, saw its ship traffic plummet by 90% in early April due to regional conflicts, bringing fertilizer transportation in the Gulf region to a near standstill. This region accounts for over 50% of global urea exports. The inability to ship goods from major producing countries such as Qatar (5.6 million tons of urea annually) and Iran (13 million tons of urea annually) directly triggered panic-driven price increases in the international market.
On April 7, a two-week temporary ceasefire agreement brokered by the US was reached, and Iran briefly opened the Strait of Hormuz, allowing a small number of ships to pass through. This news brought a brief respite to the market, but the resumption of shipping would still take time. However, late on April 8, with Israel launching a large-scale airstrike on targets in southern Lebanon, the regional security situation deteriorated again, forcing the resumption of merchant shipping to be interrupted.
II. India's 415.34 Billion Rupees in Subsidies: Stabilizing the South Asian Fertilizer Market
On April 8, the Indian Cabinet approved a subsidy scheme for phosphate and potash fertilizers for the 2026 Kharif season (monsoon season), totaling 415.34 billion rupees (approximately US$5 billion), the second-highest subsidy amount in history. This subsidy policy aims to mitigate the impact of soaring international fertilizer prices on Indian farmers, stabilize domestic market prices, and ensure the production of staple crops such as rice and wheat.
III. Global Market Differentiation: Accelerated Supply Restructuring
The international fertilizer market is showing significant differentiation, with Asia experiencing the most severe supply shortages, many African countries facing critical food security risks, delayed spring planting in Europe, and significantly increased planting costs in the Americas. Countries are actively seeking alternative supply channels, accelerating the restructuring of the global fertilizer trade landscape. The Indonesian government announced its annual fertilizer production capacity of 14.5-15 million tons, becoming an important supply source outside of China and the Middle East, significantly increasing global market dependence on Indonesian fertilizers.
IV. Price and Supply Outlook
A recent World Bank report shows that urea prices rose 54% month-on-month in March, reaching the highest level since April 2022. In the short term, international fertilizer prices will remain high, and the supply gap will be difficult to fill quickly. Market analysts believe that if geopolitical tensions continue, urea prices may continue to rise in April, and phosphate fertilizer prices will also face upward pressure.
