The latest fertiliser disruption stems from the Israel-U.S.-Iran conflict, following previous major shocks during the Covid-19 pandemic in 2020 and the Russia-Ukraine war in 2022. According to reports from NDTV Profit, modern agriculture depends on four key fertilisers: nitrogen, phosphate, potash and urea, with China, India and the U.S. accounting for most nitrogen production, China, Morocco and the U.S. leading phosphate output, and Canada, Russia, Belarus and China supplying potash. Gulf countries including Qatar and Saudi Arabia are among the largest urea producers.
Farmers have demonstrated remarkable resilience in adapting to fertiliser shortages through various strategies. As reported by NDTV Profit, when fertiliser prices are low, farmers often apply more than optimum amounts to maximise yields, but additional fertiliser delivers diminishing returns beyond certain points. During the 2022 European crisis when soaring natural gas prices forced temporary nitrogen fertiliser plant closures, farmers responded by improving nutrient management rather than cutting production. Precision farming enables growers to apply more fertiliser where yields are higher and less where returns are lower, while crop substitution has become a common response to changing conditions.
Governments worldwide have implemented comprehensive support mechanisms to cushion the impact of fertiliser shortages. According to NDTV Profit, India allocated an additional ₹1.10 lakh crore to its fertiliser subsidy programme in FY23, with the current crisis seeing the government seek to double the existing allocation of ₹1.7 lakh crore. China restricted phosphate exports in 2021 to prioritise domestic supplies, with these restrictions remaining in place. The U.S. suspended certain import tariffs on Moroccan phosphate fertiliser to lower costs for American farmers, demonstrating how countries are diversifying import sources and strengthening domestic production capabilities. Recent developments show the U.S. Department of Agriculture's new $500 million FIELDS initiative to expand domestic fertilizer capacity, paired with the administration's broader policy pivot toward import relief and domestic production funding.
The current disruption differs from the 2022 crisis in several key aspects, as reported by NDTV Profit. Fertiliser inventories are stronger and supply chains have become more flexible and resilient, while crop prices are lower than in 2022, leaving farmers with less room to absorb higher fertiliser costs. The U.S. Department of Agriculture estimates point to broadly stable global food grain production this year, providing optimism despite regional and crop-specific disruptions. However, the outlook remains uneven, with many African countries remaining vulnerable to fertiliser shortages and rising food prices. Recent market developments show Paris corn firmed and wheat held steady while record May crush extends soy demand strength, underscoring firm domestic demand despite global supply chain challenges.
