About 30% of fertilizer, 20% of oil, 25% of liquid nitrogen gas, and 45% of sulphur pass via the Strait of Hormuz. These vital inputs are currently severely blocked. Fertilizer is at the center of the disturbance.
Image: File
By Thabile Nkunjana
What started out as a geopolitical problem is now affecting energy markets, transportation systems, fertilizer supply, and, eventually, the price of producing food on a global scale.
According to recent freight market data, the global supply chain is under increasing pressure. Cost pressures are increasing more quickly than the system can handle this, which will ultimately result in high food prices and an increase in food insecurity, particularly in Africa, Asia, and some parts of the Americas.
About 30% of fertilizer, 20% of oil, 25% of liquid nitrogen gas, and 45% of sulphur pass via the Strait of Hormuz. These vital inputs are currently severely blocked. Fertilizer is at the center of the disturbance.
According to World Bank data, fertilizer prices have skyrocketed globally as of March 2026. Diammonium phosphate (DAP), triple super phosphate (TSP), urea, and potassium chloride all saw monthly increases of 5.1%, 4.1%, 53.7%, and 2.2%, respectively, as of March 2026.
Urea, TSP, potassium chloride, and DAP increased by 83.9%, 16.6%, 13.2%, and 7.0% annually, respectively. The ongoing conflict in the Middle East, which has severely impacted cold chain logistics—from refrigerated trucks to ocean containers, which rely largely on fuel stability—is to blame for the increase in fertilizer costs globally.
The cost of merely transporting fertilizer, its production ingredients, and food produce is increasing in real time as surcharges are imposed across land, sea, and air transportation. The greatest concern at the moment is that, although this varies from country to country, food prices will eventually react to these spikes.
Fertilizer has been blamed for recent food inflation in Canada, while food inflation in the UK is predicted to reach 9% in April 2026.
Because of the favorable weather in 2025–2026, South Africa has an abundance of food resources, including cereals, vegetable oils, fruits, and vegetables, therefore there is for now no reason for panic.
But, as we saw in 2022 and 2023, food prices inevitably react when participants in the value chain are unable to bear the expenses. Since farmers are price takers, food prices usually don't rise at the farm level.
For this reason, it's critical to effectively convey the effects of trade, geopolitics, and other shocks on trade, which in turn affects food prices. South African farmers are worried since the country imports between 75% and 80% of its fertilizer, whereas Brazil buys close to 100%, and the war in the Middle East is having a major detrimental influence on the world's fertilizer supplies.
In 2025, South Africa imported $1.1 billion, or R19.8bn, worth of fertilizer. As of 2025, Russia (33%), the Middle East (29%), China (15%), the EU-28 (10%), and Africa (5%) were South Africa's leading fertilizer suppliers.
Although fertilizer is the main emphasis, other key factor is the production inputs for fertilizer itself, which the world also imports in large quantities from the Middle East. Gas and Oil can account for 70% of fertilizer production hence the war in the Middle East is as complex as they can get.
The activity also imports a significant amount of fertilizer's production inputs from the Middle East.
The Middle East conflict is as complicated as it gets because gas and oil may produce 70% of the fertilizer. Given the agricultural sector's current activity, 2026–2027 is probably going to be a challenging season given the current geopolitical challenges.
Citrus, avocados, pineapples, pears, and apples are just a few of the industries engaged in market activity. Given the current fuel rates, the expense of getting them to markets is definitely a worry.
The largest issue is the summer crop planting, where we will probably start to witness the consequences of the conflict on local fertilizer prices as the cost may influence farmers' decisions, as is presently the situation for farmers in the northern hemisphere.
Winter crop activities are on their way. Overall, it is anticipated that the short-term impact on food prices will be mild. This is a crucial point to reiterate in the context of South Africa.
The length of time that oil and fertilizer prices remain high and their impact on supply networks and production choices will determine the long-term consequences on food prices globally.
Mr Thabile Nkunjana is a senior economist under the Trade Research Unit at the National Agricultural Marketing Council
Image: LinkedIn
* Thabile Nkunjana is a senior economist under the Trade Research Unit at theNational Agricultural Marketing Council.
** He writes on his personal capacity, and does not, necessarily express of IOL orIndependent Media.
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