Gulf Conflict Triggers Global Fertiliser Crisis, Threatening Nigerian Food Security and Agricultural Investment

The escalating conflict in the Persian Gulf is severely disrupting global fertiliser trade, posing a significant threat to food security and agricultural investment in import-dependent nations like Nigeria, according to a recent World Trade Organisation (WTO) report. The crisis has brought fertiliser shipments through the vital Strait of Hormuz to a near standstill, leading to supply shortages and escalating prices for farmers worldwide.

The WTO report highlights that while fertiliser prices have seen some moderation from their initial post-conflict peaks, ongoing uncertainty surrounding the Strait’s reopening and export restrictions imposed by major producing nations continue to imperil food production. For Nigeria, a nation that has invested in domestic fertiliser blending capacity through initiatives like the Presidential Fertiliser Initiative, the implications are profound. Despite these efforts, the country remains heavily reliant on imported raw materials, including phosphate, potash, and sulphur, essential for manufacturing a substantial portion of its fertiliser supply.

Gulf economies are significant players in the global fertiliser market, accounting for nearly a quarter of worldwide nitrogen fertiliser exports and over a tenth of phosphatic fertiliser exports. The disruption to shipments via the Strait of Hormuz has made sourcing these critical inputs considerably more challenging and expensive. Even alternative shipping routes incur higher transport costs and logistical complexities, ultimately translating into increased prices for Nigerian importers.

The immediate aftermath of the conflict saw a dramatic surge in fertiliser prices, with urea doubling and diammonium phosphate (DAP) prices rising sharply. Although these prices remain below the record highs experienced during the 2022 Russia-Ukraine war, they are still sufficiently elevated to significantly inflate production costs and diminish profit margins for farmers. This comes at a time when Nigerian farmers are already contending with persistent inflation, insecurity in food-producing regions, exchange rate volatility, and rising input costs.

Durojaiye Olusegun, Founder of Greenfield Agro-Allied Consult and Farming Systems Limited, confirmed the current exorbitant prices of fertilisers, noting the renewed price hikes following the recent hostilities. He explained that the Strait of Hormuz is a crucial shipping route not only for finished fertiliser products but also for key components like urea. Olusegun warned that reduced fertiliser application due to cost pressures inevitably leads to lower crop yields, impacting food supplies and the availability of raw materials for industries, thereby exerting further upward pressure on food prices.

The WTO’s analysis underscores the concentrated nature of global fertiliser production, with a limited number of countries dominating the supply of nitrogen and phosphate fertilisers. This vulnerability highlights the imperative for Nigeria to reduce its dependence on imported inputs by bolstering domestic production of critical raw materials, investing in local phosphate mining, supporting petrochemical industries for fertiliser feedstocks, and strengthening regional supply chains within Africa. Diversifying import sources is also crucial to mitigate exposure to geopolitical shocks originating from any single region.

The report suggests that Nigeria could adopt measures similar to those implemented by other nations, such as fertiliser subsidies, temporary suspension of import tariffs, or increased investment in domestic production. Expanding fertiliser support programmes, ensuring timely distribution, improving access to agricultural credit, and promoting efficient fertiliser use through precision farming and soil testing are among the potential interventions. These strategies could help maintain agricultural productivity and cushion the impact of global market disruptions on the sector.

The WTO’s findings serve as a stark reminder that global geopolitical events can have rapid and significant repercussions on domestic agriculture. Ensuring reliable access to affordable fertiliser remains paramount for safeguarding food production, controlling inflation, and fortifying Nigeria’s long-term food security.

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