Fertiliser Shortages Amid Iran Conflict: A Growing Concern for Developing Nations

Fertiliser shortages resulting from the ongoing conflict involving Iran are emerging as a significant concern for developing countries, according to the International Trade Centre (ITC). Pamela Coke-Hamilton, the executive director of the ITC, emphasized that while rising oil and gas prices may offer temporary benefits to some producers, the immediate issue of fertiliser availability poses a more pressing threat to food security and stability in these regions.

Reuters

The Strait of Hormuz, a critical maritime route, typically facilitates the passage of approximately one-third of global urea. However, the blockade by Iran and the United States has disrupted this flow, leading to significant shortages. Coke-Hamilton noted that the timeline for agricultural preparations is being jeopardized, as farmers are unable to secure sufficient fertiliser for upcoming harvests.

The Straits Times

The ITC, which focuses on promoting trade for developing countries, has highlighted the heightened dependence on nitrogen fertilisers from Gulf producers in nations such as Kenya, Uganda, South Africa, Thailand, and Sri Lanka. The agency's analysis indicates that shortages are likely to result in reduced fertiliser use and lower agricultural yields, particularly in regions like Sub-Saharan Africa and South Asia, where farming is heavily reliant on rainfall and planting schedules are critical.

Reuters

To mitigate the impact of these shortages, the ITC has pointed to alternative suppliers in North Africa. Egypt, for instance, has an estimated $1.6 billion in untapped fertiliser exports, while Algeria could contribute an additional $1.3 billion. These countries may help alleviate some of the pressure on developing nations facing fertiliser deficits.

Reuters

In response to the crisis, the United Nations has initiated a diplomatic push aimed at ensuring safe passage for fertiliser shipments through the Strait of Hormuz. This effort underscores the urgency of addressing the fertiliser shortages that threaten food security in developing countries.

The Straits Times

While some countries, including Nigeria, Kazakhstan, Brazil, Angola, and Libya, may see increased oil revenues due to rising prices, the ITC cautioned that these benefits would be limited. Most of these nations, except Kazakhstan, are net importers of refined products, which may hinder their ability to fully capitalize on the situation.

Reuters

Despite potential benefits from higher natural gas prices for countries like Algeria, Malaysia, Turkmenistan, and Azerbaijan, the ITC has indicated that the expansion of supply is likely to be constrained in the short term. This limitation raises concerns about the immediate availability of fertilisers needed for agricultural production.

The Straits TimesReuters

“The more immediate issue is fertiliser, because that then affects food security and food security is always the basis for stability,” — Pamela Coke-Hamilton, Executive Director, International Trade Centre

The Straits Times

“There are significant issues with respect to availability of fertilisers and also there's a timeline for agriculture in terms of ensuring you have enough for the next harvest, which is being missed now,” — Pamela Coke-Hamilton, Executive Director, International Trade Centre

The Straits Times

“The ITC said dependence on nitrogen fertilisers from Gulf producers is highest in several Asian and African developing countries, such as Kenya, Uganda, South Africa, Thailand and Sri Lanka.” — International Trade Centre

The Straits Times

“Higher natural gas prices may benefit countries such as Algeria, Malaysia, Turkmenistan and Azerbaijan, but expansion of supply is likely to be limited in the short term, the ITC said.” — International Trade Centre

The Straits Times