We had another long weekend in South Africa, and the first quarter of 2026 is already behind us.
China is the dominant player, producing 30% of the world’s phosphate fertilizer and controlling nearly 40% of global phosphate trade, along with 5 million tons of urea. In December 2025, China’s phosphate fertilizer industry decided — without a formal government ban — to halt new exports until at least August 2026.This decision came at the worst possible time.
At the same moment, the blockade in the Strait of Hormuz removed about one-third of global seaborne urea from the market. The double supply shock sent prices soaring.Urea prices jumped 25% in just two weeks, rising from around $350 per ton at the end of 2025 to over $800 per ton by March 2026 at key import hubs.The impact on farming is direct and painful:
- Corn production costs in the US have climbed to $166 per acre.
- Many farmers are switching to soybeans to survive.
- Global fertilizer prices could rise another 15–20% by mid-2026 if the shortages continue.
The ripple effects are being felt worldwide, including in India, where farmers now pay prices heavily influenced by decisions made 5,000 km away in China.
Countries no longer treat fertilizers purely as global commodities. They are increasingly viewed as strategic national assets. What was once simple trade has become geopolitics.In short:
China’s decision to stop exporting phosphate fertilizer, combined with disruptions in the Strait of Hormuz, has triggered sharp price increases and uncertainty for the 2026 planting season across three continents. When the world’s largest fertilizer producer prioritises domestic needs over global supply, the consequences for food production costs and global food prices become very real.
China’s decision to stop exporting phosphate fertilizer, combined with disruptions in the Strait of Hormuz, has triggered sharp price increases and uncertainty for the 2026 planting season across three continents. When the world’s largest fertilizer producer prioritises domestic needs over global supply, the consequences for food production costs and global food prices become very real.
South Africa is facing significant pressure on fertilizer prices due to the ongoing war in the Middle East and disruptions in the Strait of Hormuz.The country imports more than 80% of its fertilizer, and fertilizer costs make up 35–50% of grain farmers’ total production expenses. Any major increase in global fertilizer prices therefore hits local farmers hard.Since the conflict intensified, urea and nitrogen fertilizer prices have risen sharply — by 25–50% in key international benchmarks. Local delivered prices in South Africa have already increased because of higher global prices, freight costs, and insurance.
Grain SA and the Fertilizer Association of Southern Africa have warned that the combined rise in fertilizer and diesel prices is putting serious financial strain on farmers, especially as the winter planting season approaches.Farmers operating on tight margins may respond by applying less fertilizer, planting smaller areas, or switching to crops that need less nitrogen, such as soybeans or sunflowers instead of maize.
These changes could eventually lead to higher food prices for consumers, particularly for staples like maize meal.At present (early April 2026), there is no acute physical shortage of fertilizer in the country, but prices continue to climb due to global supply concerns and higher shipping costs. Although Iran has allowed South African vessels to pass through the Strait of Hormuz, rerouting, delays, and increased insurance costs are still pushing prices upward.
The Iran war has created a major cost shock for South African agriculture through sharply higher fertilizer and fuel prices. While the full impact on the 2026/27 planting season is still unfolding, the increases are already squeezing farm profitability and raising concerns about future food inflation.
South Africa is facing significant pressure on fertilizer prices due to the ongoing war in the Middle East and disruptions in the Strait of Hormuz.The country imports more than 80% of its fertilizer, and fertilizer costs make up 35–50% of grain farmers’ total production expenses. Any major increase in global fertilizer prices therefore hits local farmers hard.Since the conflict intensified, urea and nitrogen fertilizer prices have risen sharply — by 25–50% in key international benchmarks. Local delivered prices in South Africa have already increased because of higher global prices, freight costs, and insurance.
Although input costs (especially fertiliser and fuel) are rising sharply, there is no guarantee that grain prices will increase accordingly.Farmers may face much higher production costs in the 2026/27 season, but grain prices are determined by global supply and demand — not just by what it costs to grow the crop locally. If global grain supplies remain ample (due to good harvests in major producing countries like the US, Brazil, Argentina, or Ukraine), international prices could stay flat or even fall, even as South African farmers pay significantly more for fertiliser and diesel.This creates a dangerous “cost-price squeeze” for local producers:
- Costs go up
- But selling prices may not rise enough (or at all) to cover the extra expenses
Want to join our popular weekly viewpoint? Contact us at This email address is being protected from spambots. You need JavaScript enabled to view it.! You can make your own Viewpoint. - Our Professional civilized approach to your option is respected.
Every week, our flagship Viewpoint article is now shared with 33 international media houses across continents. These partners translate and publish the content in 12 international languages, putting South Africa's farming stories, challenges and triumphs in front of thousands of readers worldwide.
DISCLAIMER
The views and opinions expressed in this program are those of the writers and do not necessarily reflect the views or positions of any entities they represent. The information contained in this website is for general information purposes only. The information is provided by CRA and while we endeavour to keep the information up to date and correct, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to the website or the information, products, services, or related graphics contained on the website for any purpose. Any reliance you place on such information is therefore strictly at your own risk.
