Fertilizer and Food Markets on Alert as New Export Restrictions Tighten Global Supply

Recent export bans, quota regimes and tighter licensing on fertilizers and key inputs, layered on top of the 2026 Strait of Hormuz crisis, are tightening global nutrient supply and raising costs for agricultural producers worldwide. Urea prices have already surged and nitrogen, phosphate and potash markets are signaling heightened volatility. Traders are closely watching how governments recalibrate export controls as food security concerns mount.

While some importing countries are easing tariffs and duties to secure supply, others are maintaining or extending quantitative limits and licensing requirements on fertilizer exports. Combined with disrupted flows through the Strait of Hormuz and higher energy and freight costs, these measures are reshaping trade routes for fertilizers and, by extension, grains, oilseeds and sugar that depend on reliable nutrient availability for upcoming planting seasons.

Introduction

The escalation of conflict around the Strait of Hormuz in early 2026 has significantly disrupted seaborne trade in energy and fertilizer products, prompting sharp price spikes across nitrogen and phosphate markets. According to recent analysis, urea prices had already risen by around 50% by late March 2026, with other fertilizers such as diammonium phosphate also moving higher as LNG and sulfur supplies tightened.

In parallel, several large producing countries have adopted or prolonged export restrictions on fertilizers and related inputs. China has tightened controls on exports of urea and sulfuric acid, allowing only limited volumes under quota, while the Russian Federation has extended export quotas and licensing requirements for multiple fertilizer products. Türkiye has also applied a temporary ban on sulfur exports, a key input for phosphates. These policies are amplifying the supply shock from the Gulf and forcing import-dependent agrifood economies to reassess procurement strategies.

Immediate Market Impact

The combined effect of export bans, quotas and licensing restrictions is a structurally tighter fertilizer balance sheet for 2026–27. Policy monitoring by the WTO and AMIS indicates that such measures have at times covered up to 15% of global fertilizer trade during the current Gulf conflict, underscoring the breadth of intervention. With flows via the Strait of Hormuz constrained, freight rates and insurance premia for alternative routes have risen, increasing delivered costs for key importers in Asia, Africa and Latin America.

Higher nitrogen and phosphate prices are already feeding into forward cost curves for major crops. Analysts warn that coinciding constraints during the Northern Hemisphere’s planting windows could compel farmers to reduce application rates, particularly in price-sensitive markets, with potential yield impacts for wheat, corn, rice and oilseeds. Futures markets are reflecting these risks through wider spreads and elevated volatility, especially in urea and DAP benchmarks, while grain traders factor in higher production cost assumptions.

Supply Chain Disruptions

Export licensing and quotas are slowing cargo approvals and complicating shipment scheduling out of major fertilizer hubs. Extended export quotas and temporary license suspensions in Russia, alongside China’s quota-based urea exports and sulfuric acid controls, have led to intermittent delays and renegotiations of contracts. Port operators and shippers report tighter windows and increased paperwork, raising the risk of missed laycans and demurrage costs.

On the maritime side, disruptions around the Strait of Hormuz have reduced available tonnage willing to call in the region and pushed some cargoes onto longer, costlier routes that bypass high-risk waters. This not only affects shipments of nitrogen and phosphate fertilizers but also sulfur and ammonia feedstocks, with knock-on effects for downstream NPK production. Importing regions with limited storage capacity are particularly vulnerable to shipment slippage, which can cascade into missed application windows and localized shortages.

Commodities Potentially Affected

• Urea and other nitrogen fertilizers – Directly hit by Chinese export controls and higher gas and freight costs linked to the Gulf crisis, driving global price spikes and supply uncertainty.
• Phosphate fertilizers (DAP, MAP, TSP) – Impacted by tighter sulfur and sulfuric acid markets and export restrictions, raising production costs and limiting spot availability.
• Potash – Not always directly restricted, but exposed to broader fertilizer market tightness and higher freight and insurance costs, especially for imports into Asia and Latin America.
• Wheat, corn and rice – Higher fertilizer costs and potential application cuts threaten yields, particularly in emerging markets with constrained farm margins.
• Soybeans and sugar – Brazil’s large dependence on imported fertilizers means disruptions could ripple into soybean and sugar output and export availability.

Regional Trade Implications

Trade flows are already beginning to adjust. Some importing countries are accelerating efforts to diversify away from traditional suppliers facing binding export quotas or licensing delays, seeking alternative origins in North Africa, the Gulf outside the immediate conflict zone, and North America. At the same time, measures such as the temporary suspension of U.S. duties on certain phosphate fertilizers from Morocco are designed to unlock additional supply for domestic farmers by removing cost barriers.

Large agricultural exporters heavily reliant on imported fertilizers—such as Brazil for soybeans, corn and sugar—are at risk of margin compression and potentially lower output if high prices persist. Conversely, producers with more secure or domestic nutrient supply may gain competitiveness in global grain and oilseed markets. In the fertilizer space itself, exporters not subject to stringent controls could capture market share and price premia, though they may also face political pressure to prioritize domestic supply.

Market Outlook

In the short term, fertilizer markets are likely to remain tight and volatile as long as conflict-related disruptions in the Strait of Hormuz coincide with export controls in major producing countries. Traders will watch closely for any policy shifts in China and Russia, as even partial relaxation of quotas or licensing requirements could release additional volumes and ease prices.

On the demand side, importers may respond by adjusting crop rotations, delaying applications or switching nutrient blends, moves that could alter future global balances for wheat, corn, soybeans and sugar. Parallel policy actions—such as domestic programs to expand fertilizer production capacity or reduce import dependence—may gradually mitigate exposure but will take time to materialize. Until then, risk premiums tied to policy uncertainty and logistics bottlenecks are likely to stay embedded in both fertilizer and food commodity prices.

CMB Market Insight

For commodity traders, importers and food manufacturers, the current wave of fertilizer export bans, quotas and licensing restrictions represents a structural risk rather than a transient shock. The intersection of security-driven disruptions in the Strait of Hormuz with deliberate export policy measures in key producing countries is fragmenting what has traditionally been a highly globalized market for fertilizers and their inputs.

Strategically, market participants should plan for prolonged periods of elevated basis and freight costs, greater origin risk and tighter credit and insurance terms for shipments linked to high-risk routes or restricted exporters. Diversifying sourcing, strengthening supplier relationships in less constrained regions, and closely tracking policy developments will be critical to managing exposure as fertilizer markets continue to shape the cost and availability of global food supplies into the 2026–27 seasons.