Global Export Curbs on Fertilizers and Key Food Staples Raise New Risks for Agri-Commodity Trade

Recent and prospective export restrictions on fertilizers and staple foods are tightening global input and food markets, amplifying price volatility and forcing traders, importers and food companies to reassess sourcing strategies. With fertilizer prices already elevated due to the Iran war and the Strait of Hormuz crisis, any new bans, quotas or licensing curbs risk cascading through grain, oilseed and sugar markets in the second half of 2026.

Market participants are watching closely as large producers, particularly in China and the wider Middle East corridor, adjust fertilizer export policies in response to domestic affordability concerns and war-related disruptions. Parallel discussions in several major food-exporting countries over potential controls on rice and other staples underscore renewed vulnerability of global food security to trade policy shocks.

Introduction

The 2026 Iran war and disruptions around the Strait of Hormuz have sharply tightened global supplies of key fertilizer inputs such as ammonia, sulfur and natural gas, pushing urea prices up by around 50% since the start of the conflict and lifting diammonium phosphate (DAP) and other nutrient prices. In this context, governments are increasingly using export bans, quotas and licensing systems to protect their domestic markets.

China, one of the world’s largest fertilizer producers, has expanded and adjusted export restrictions on nitrogen and phosphate products and key inputs such as sulfuric acid, contributing to tightness and higher costs in global fertilizer trade. These moves, combined with sanctions-related frictions affecting Russian fertilizer exports and continued instability in major shipping lanes, have heightened supply risk for fertilizer-import dependent agricultural producers in regions such as Latin America, South Asia and sub-Saharan Africa.

Immediate Market Impact

Fertilizer export curbs are feeding directly into higher and more volatile input costs for growers. The World Bank’s latest Commodity Markets Outlook projects the fertilizer price index to rise by more than 30% in 2026, largely on the back of conflict-related disruptions and export restrictions from key suppliers. This has already eroded fertilizer affordability, especially for urea, and threatens to reduce application rates in the upcoming planting seasons.

In parallel, ongoing and potential export controls on wheat, rice and other staples—often implemented through quotas, licensing requirements or de facto bans—are raising concerns about renewed trade distortions similar to those seen in the 2007–08 food price crisis, when widespread rice export bans by major Asian exporters sharply tightened world supplies and spurred price spikes. Traders report widening basis risks between domestic and international prices as policy uncertainty becomes a key driver of market behavior.

Supply Chain Disruptions

Export licensing regimes and quotas are increasing lead times, complicating logistics planning and adding compliance costs throughout the fertilizer and food supply chains. For fertilizers, reduced or less predictable shipments from China and the Middle East are forcing importers to diversify origins and accept longer, costlier routes, especially where cargoes must avoid high-risk Gulf waters affected by the Strait of Hormuz crisis.

In grains and rice, memories of previous episodes—such as Ukraine’s use of grain export quotas that operated as near-bans and earlier bans by major exporters like India—underscore the risk that even modest quantitative limits or slow licensing approvals can paralyze trade flows. Import-dependent regions in North Africa, the Middle East and parts of Asia remain particularly exposed to shipment delays and sudden contract disruptions tied to policy changes in supplier countries.

Commodities Potentially Affected

• Urea: Highly exposed to natural gas and ammonia disruptions in the Middle East and to export policy decisions in key producing countries, driving sharp price increases and affordability issues.
• Phosphate fertilizers (DAP, MAP, TSP): Dependent on Chinese export policy and sulfuric acid availability; recent and ongoing restrictions from China are tightening global supply and boosting prices.
• Potash (MOP): Indirectly affected by sanctions and logistics issues involving major exporters around Russia and Belarus, with any formal export controls likely to exacerbate existing tightness.
• Wheat and coarse grains: Vulnerable to renewed export licensing, quotas or de facto bans in key Black Sea and other exporting countries, which can quickly push up world prices and volatility.
• Rice: Historically sensitive to export policy shifts in Asia; earlier crises showed that bans and quotas by a handful of major exporters can trigger disproportionate global price reactions.
• Oilseeds and sugar: Heavily reliant on fertilizer-intensive production in Brazil and other Latin American exporters; sustained fertilizer shortages or curbs could cut yields, tightening exportable surpluses.

Regional Trade Implications

Major fertilizer-importing agricultural producers such as Brazil, India and several Southeast Asian and African economies face the greatest exposure to continued export controls. Brazil, which accounts for nearly 60% of global soybean exports and is also a key corn and sugar supplier, relies heavily on imported fertilizers; higher prices or constrained availability could reduce application rates, dampening yields and export volumes.

Conversely, countries with relatively abundant domestic fertilizer capacity and more open export regimes—such as some North American and Middle Eastern producers—could gain market share if they maintain reliable shipping and policy stability. However, elevated freight and insurance costs through contested maritime corridors may offset some of these advantages and limit how quickly trade flows can adjust.

In food staples, import-dependent regions from North Africa and the Middle East to small island states may have to pivot among suppliers and increase reliance on strategic stocks and bilateral government-to-government deals. Any move towards coordinated or overlapping export controls among major exporters would significantly constrain options for vulnerable food importers.

Market Outlook

In the short term, fertilizer and food commodity markets are likely to remain highly sensitive to incremental policy announcements on export licensing, quotas and bans. With fertilizer prices already projected to stay elevated through 2026, even small additional constraints on exports from key suppliers could trigger outsized price reactions and basis volatility.

Traders will closely monitor any changes to China’s fertilizer export measures, potential new restrictions from Middle Eastern producers directly involved in the Iran war, and signals from large grain and rice exporters about stock management and food price inflation. Importers, meanwhile, are expected to continue building precautionary inventories where financing allows, keeping physical markets tight and term premiums firm.

CMB Market Insight

The tightening nexus between security shocks, export controls and commodity trade is once again at the center of agricultural risk management. For fertilizers, the combination of war-related disruptions and policy-driven export curbs has turned supply security into a strategic priority for both governments and large agribusinesses, with knock-on effects for crop yields and food prices worldwide.

For market participants, the key strategic response will be diversification—of origins, shipping routes and contract structures—while maintaining strong visibility on policy developments in a small group of pivotal exporting countries. In an environment where a single export licensing decision can reverberate from fertilizer plants to supermarket shelves, proactive hedging and flexible sourcing will be essential to navigating the remainder of the 2026–27 marketing cycle.