Fertiliser affordability plunges, compounding impact of high prices

Fertiliser prices are set to rise significantly, with forecasts indicating increases of over 30% this year compared to last. This surge is exacerbated by ongoing disruptions in shipping through the Strait of Hormuz, which is expected to constrain supply until at least mid-2026.

Farmers in least developed countries are particularly vulnerable, facing financial challenges that limit their ability to maintain fertiliser usage. The grains-to-fertiliser price ratio has reached its lowest level since 1960, prompting concerns about reduced application rates and their subsequent impact on crop yields, especially for staples like rice, maize, and wheat.

As the crisis unfolds, the agricultural sector will experience varied effects depending on factors such as crop type, existing fertiliser application levels, and regional dependency on imports. Countries heavily reliant on Middle Eastern fertiliser imports, like Australia and Thailand, are at heightened risk, while North America may be somewhat insulated due to its domestic production capabilities.

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