The ongoing conflict in Iran and the subsequent blockade of the Strait of Hormuz are sending shockwaves through global agricultural markets, raising serious concerns about food security. A new report from the World Bank highlights a sharp rise in fertiliser costs, driven primarily by soaring natural gas prices, which has pushed farmers' affordability to its lowest point in four years.
European agriculture ministers are reportedly calling for urgent intervention to avert a prolonged food price crisis and to protect next year's grain harvests. While Europe is not currently facing an immediate supply shortage, the continent's farmers are under mounting pressure from rising input costs and regulatory burdens.
Europe's Relative Resilience, but Future Risks Loom
A spokesperson for Fertilisers Europe told Euronews that "Europe is not facing a supply issue for the current season given the relatively high output of European production which historically satisfies around 70% of European demand as well as record high import levels in Q4 2025." However, they added that "farmers are operating in a complex environment and facing tight margins. EU institutions should reinforce aid and assistance to European farmers, while ensuring that such support does not come at the expense of competitiveness among EU fertiliser producers."
The concern is particularly acute for future crops. A representative from CropLife Europe emphasised that "European farmers are already operating under significant economic and regulatory pressure, and global shocks simply add fuel to that fire. Food security depends on resilience which means ensuring farmers have timely access to all the tools they need to protect crops and manage risk, even in periods of volatility."
The crisis underscores the intrinsic link between energy markets and food production. Natural gas is the primary feedstock for nitrogen-based fertilisers, so any volatility in energy prices directly impacts farming costs. As the Fertilisers Europe spokesperson noted, "fertilisers are energy, so when energy costs rise, automatically fertiliser costs rise."
Global South Bears the Brunt
While Europe has so far weathered the storm better than other regions, the situation is far more dire in Asia and the Global South. According to the Food and Agriculture Organisation of the United Nations (FAO), shipping disruptions in the Strait of Hormuz have triggered severe fertiliser shortages in countries such as India, Bangladesh, Sri Lanka, Egypt, Sudan, and parts of Sub-Saharan Africa. These regions are experiencing elevated costs, reduced availability, and looming food insecurity.
The FAO's Food Price Index has already begun to surge in response to these pressures. Analysts warn that as transport expenses rise and logistics become more complex, the "fertiliser squeeze" will likely push food prices well beyond current levels. For many emerging economies already grappling with high inflation, this may necessitate tighter monetary policy to prevent broader economic instability.
The World Bank report notes that reduced fertiliser application today could lead to significantly lower harvests in the coming seasons, potentially extending the duration of the current poverty crisis. Expert modelling from the International Food Policy Research Institute (IFPRI) suggests that such a reduction would almost certainly result in significantly lower harvests in the next growing season, specifically impacting global grain stocks.
European Call for Strategic Autonomy
European agriculture ministers are now pushing for strategies to safeguard fertiliser supply and mitigate the impact of high energy prices on the agricultural sector. The Fertilisers Europe spokesperson stressed that beyond any immediate response to the Iran war, there must be a fundamental shift in how the sector is approached. "Longer-term, European strategic autonomy on food cannot stop at farms or shelves. It must include the upstream inputs that make food production possible," they said. "Ahead of the upcoming Fertiliser Action Plan, we called on the European Commission to recognise the European fertiliser industry as a strategic pillar of the EU's strategic autonomy."
This call for autonomy comes amid broader economic uncertainty, as the ECB holds rates at 2% as stagflation fears mount across the Eurozone. The energy crisis has also prompted the EU to relax state aid rules to shield businesses from the Middle East-driven energy crisis, a move that could provide some relief to the agricultural sector.
As the World Bank warns, the current trajectory could lead to a persistent cycle of high prices and low supply, disproportionately affecting regions that are already food-insecure. Without coordinated action, the fertiliser crisis sparked by the Iran war may have lasting consequences for global food security.
