Fertlisers & Hormuz
- Karl Johansson
- för 2 dagar sedan
- 3 min läsning
What is going on with fertilisers?
One of the big media stories when the war in Iran broke out and the strait of Hormuz was closed was about fertilisers. Given that large amounts of urea, a form of fertiliser which releases nitrogen, and ammonia, another fertiliser, are produced in the Persian Gulf, there was a real worry that global food supply could decrease if fertiliser was stuck in the gulf. Six months later journalists have left us on the edge of our seats desperately wishing for updates on urea export volumes. Was there a critical shock to world agriculture or was it all overstated?
The International Chamber of Commerce cites industry estimates claiming that 3.7 million tonnes of urea demand was destroyed or delayed between April and June 2026. To put those numbers into context, the International Fertilizer Association’s statistics show that global production of urea product stood at about 200 million tonnes in 2024. So less than 2% of urea demand was destroyed, crisis averted. Unless we factor in price and export destinations.
The International Food Policy Research Institute published a blog post in April 2026 where it showed which states are the largest importers of nitrogenous fertilisers (i.e. urea and ammonia). The top five are India, Australia, Brazil, the US, and Thailand. My guess is that Thailand, Brazil, and India are far more price sensitive than Australia or the US, meaning that insofar as demand was truly destroyed rather than simply delayed – as seems probable given that the strait is still not open – the demand was most likely mainly destroyed in India and/or Thailand.
Of course, this is an assumption on my part, and if any reader is well informed on South Asian and South East Asian agriculture feel free to correct me. But if we accept this premise for now, then we have reason to worry about political and economic developments in Asia in the coming year. After all, it was the unaffordability of food which caused the protests which kicked off the war in Iran in the first place.
Let’s start with Thailand. Thailand is a large country which while not rich is a middle-income country with a diversified economy. The reasons to be worried about Thailand are mainly political and socio-political. Thailand is generally stable but has had some border skirmishes with Cambodia last year. If food prices rise it is a tried and true method of holding on to political power to engage in foreign policy distractions, and given the recent history with its neighbour there could be more trouble ahead if reduced fertiliser imports lead to a smaller harvest and thus higher food prices. Secondly, it is worth noting that Thailand is a highly unequal country with great wealth disparities, which primes it for political unrest should food prices rise quickly or dramatically.
India is in many ways a similar story, it has had recent border skirmishes with both China and Pakistan, and has incredibly wealth disparities coupled with a lower median income level. India also imports a lot more fertilisers from the Persian Gulf than the other countries in the top five; indeed it imports more than a million more tonnes than Thailand, almost 800 000 tonnes more than the second biggest importer Australia. This makes it far more vulnerable to disruptions in fertiliser supply than most other countries, and by extension the risk of experiencing some kind of unrest is highest in India.
Of course, none of this is proof positive that some calamitous political upheaval is preordained for Thailand or India, good policy and robust foreign aid programmes should be able to alleviate any food crisis, rather this is an exercise in prediction. I hope to be wrong, but I wouldn’t completely write of the risk of stormy seas ahead in South and South East Asia.
If you liked this post you can read a previous post about AI here or the rest of my writings here. I also have a section for longer reads I call essays here, I particularly recommend my series called The Bird & The Technoking exploring Elon Musk's takeover of Twitter, and its political and cultural implications. It'd mean a lot to me if you recommended the blog to a friend or coworker. Come back next Monday for a new post!
I've always been interested in politics, economics, and the interplay between. The blog is a place for me to explore different ideas and concepts relating to economics or politics, be that national or international. The goal for the blog is to make you think; to provide new perspectives.
Written by Karl Johansson
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Cover photo by Meriç Tuna from Pexels, edited by Karl Johansson
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