Global Fertiliser Trade Collapses 30% as Middle East Conflict Chokes Flows, Raising Crop Yield Risks

Global fertiliser trade has fallen sharply in the first four months of 2026, with the FAO reporting a 30% year‑on‑year drop in volumes as the Middle East conflict disrupts shipping and prompts export curbs. The contraction is tightening nutrient availability and raising input costs just ahead of the 2026–27 planting cycle, with potential implications for yields in major grain and oilseed exporters and import‑dependent food economies.

With fertiliser prices already elevated and energy markets volatile, the slump in trade is feeding renewed concerns about food inflation and supply risks. Traders now face thinner liquidity, more fragmented trade flows and greater price volatility across nitrogen, phosphate and potash markets, with downstream effects expected in wheat, corn, rice and oilseed pricing over the next 6–18 months.

Headline

Global Fertiliser Trade Collapses 30% as Middle East Conflict Chokes Flows, Raising Crop Yield Risks

Introduction

The UN Food and Agriculture Organization (FAO) reports that global fertiliser trade volumes fell to 41 million tonnes between January and April 2026, down from 58 million tonnes in the same period of 2025, a 30% year‑on‑year decline. The value of trade dropped 18% to around $18 billion over the same period, reflecting both lower volumes and demand destruction amid high prices.

The FAO attributes the contraction primarily to supply shocks linked to the ongoing conflict in the Middle East, which has disrupted key shipping routes for nitrogen and phosphate products and critical inputs such as ammonia and sulphur. Export restrictions by major suppliers, including China and Turkey, and delayed procurement by farmers facing tight margins have further dampened liquidity in international fertiliser markets.

Immediate Market Impact

The sharp drop in traded volumes comes against a backdrop of already elevated fertiliser benchmarks, with the World Bank projecting fertiliser prices to rise by more than 30% in 2026 versus last year. Freight risk premiums and insurance costs on routes exposed to the Middle East have increased, adding a further cost layer for importers in South Asia, East Africa and Europe.

Spot markets for urea, DAP and ammonia remain thin, increasing intraday and week‑to‑week price volatility as buyers compete for limited export parcels. Several import‑dependent countries have reported delayed or undersubscribed tenders, while some farmers in Europe and North America are postponing or scaling back applications, potentially reducing yield potential for the upcoming crop cycle.

Supply Chain Disruptions

The Middle East is a pivotal hub for nitrogen and phosphate fertilisers and related feedstocks; disruptions there are constraining global flows of urea, ammonia, DAP/MAP and sulphur. The FAO notes that trade via routes affected by the regional conflict has been intermittently curtailed, contributing to higher freight costs and longer lead times, even where shipments continue.

Export controls and licensing measures by some large producers are compounding the logistics shock. China’s tighter management of urea and phosphate exports and Turkey’s limits on selected fertiliser and raw material shipments have reduced availability in key destination markets, including Brazil, India and parts of Africa. Import programmes have become more staggered and opportunistic, with buyers seeking to diversify origin and timing in response to uncertain loadings.

Downstream, higher input costs and delivery uncertainty are pushing farmers to adjust nutrient plans—either by cutting application rates, shifting to lower‑analysis products, or delaying purchases until closer to planting. These changes raise the risk of uneven nutrient application and potential yield penalties, particularly where working capital constraints prevent full coverage at current price levels.

Commodities Potentially Affected

• Wheat: Highly responsive to nitrogen application; reduced or delayed urea use in Europe, North Africa, the Middle East and parts of Asia could trim yield potential into the 2026–27 season, tightening exportable surpluses.
• Maize/Corn: Corn’s heavy nitrogen requirement makes it particularly exposed to urea and ammonia price spikes, with US, Brazilian and Ukrainian output sensitive to input affordability and access.
• Rice: Major Asian rice producers depend on nitrogen and phosphate inputs; persistent fertiliser tightness could limit yield gains and constrain export growth, affecting price formation in importing regions of Africa and the Middle East.
• Oilseeds (soybean, rapeseed, sunflower): While less nitrogen‑intensive than cereals, oilseeds still rely on balanced NPK regimes; sustained fertiliser cost inflation may curb planted area or intensification, especially where margins are already narrow.
• Pulses and specialty crops: Smallholder and marginal producers may cut back most sharply on fertiliser use, raising variability in yields for pulses, vegetables and fruit, with localized supply shocks feeding into regional food price indices.

Regional Trade Implications

Import‑dependent regions in South Asia, sub‑Saharan Africa and parts of Latin America are among the most exposed to the current disruption. Their reliance on Middle Eastern and Black Sea origins, combined with constrained access to credit, leaves them vulnerable to both price spikes and shipment delays, potentially forcing rationing or reduced application rates.

Conversely, exporters with more diversified feedstock bases—such as North American nitrogen and Canadian potash producers—stand to benefit from improved pricing power and widened netbacks as buyers seek alternative supply. China’s managed export policy could allow it to calibrate shipments in response to global tightness, but tighter controls would amplify scarcity in key import markets.

In grain and oilseed trade, any fertiliser‑driven yield losses in major exporting regions could reconfigure flows, lifting demand for origins less affected by input shocks. This would support basis levels and freight demand on some routes even if headline global cereal output remains near historical averages.

Market Outlook

In the near term, fertiliser markets are likely to remain tight, with limited spot availability, elevated freight and heightened sensitivity to any additional policy or geopolitical shocks. Traders will watch closely for changes in export restrictions, the operational status of Middle Eastern production and shipping capacity, and any coordinated government interventions to secure supplies for domestic agriculture.

For agricultural commodities, the primary risk channel is through 2026–27 yield outcomes rather than immediate supply losses. A prolonged period of constrained fertiliser trade could turn today’s input shock into tomorrow’s crop‑output and food‑price shock, particularly if combined with adverse growing conditions. Market participants should monitor fertiliser tender activity, farmer purchasing patterns, and early crop condition indicators to gauge how much of the yield risk is being realized.

CMB Market Insight

The abrupt 30% contraction in global fertiliser trade marks a critical inflection point for agri‑commodity markets, transforming fertiliser from a cost headwind into a potential constraint on future crop output. While current cereal stocks and production estimates still indicate broadly adequate global supplies, the fertiliser shock injects a new layer of uncertainty into medium‑term balance sheets for wheat, corn, rice and oilseeds.

For traders and industry participants, strategic positioning now hinges on tracking how quickly trade flows can re‑route around the Middle East bottleneck, whether export controls ease, and how strongly farmers cut or defer nutrient applications. If disruptions persist into the next procurement cycle, fertiliser‑linked yield downgrades could underpin a more sustained upturn in global food prices, with the greatest vulnerability in import‑dependent and low‑income markets.