Intelligence Briefing — 21 March 2026
The Hormuz
Fertiliser Crisis
How the 2026 Iran War is reshaping Australia's specialty, amenity & horticultural fertiliser market—and threatening food security.
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01 — Context
The Strait Closes
On 28 February 2026, the United States and Israel launched coordinated military strikes against Iran. The Strait of Hormuz—through which an estimated 20–30% of global seaborne fertiliser trade passes—has been closed to US, Israeli, and Western-allied shipping since, with selective passage permitted for neutral-flagged vessels on a case-by-case basis.
02 — Price Shock
Prices Spike Across
the Board
Within three weeks of the conflict, global urea prices surged approximately 50%, while Australian domestic granular urea breached A$1,000/t for the first time.
Global Urea Price — FOB Egypt
US$/tonne, 11 Feb – 17 Mar 2026
Source: Carnegie Endowment / Argus Media / Trading Economics
Pre-War vs. Current Pricing
Key fertiliser product benchmarks
Source: Argus Media, NFF, ABS Trade Data
03 — Import Dependency
Australia's Critical
Vulnerability
Since Incitec Pivot Limited (IPL) closed its 280,000 t/yr urea Gibson Island facility in 2022, Australia has become almost entirely dependent on urea imports. In 2025, 64% came from the Persian Gulf—the region now cut off.
Urea Import Sources (2025)
Share of Australian urea imports by origin
Source: Australian Bureau of Statistics
Domestic Supply Runway
Mid-April
Current domestic urea stocks will run out by mid-April 2026 without resupply.
In Transit Now
284,000t
118,900t from SE Asia + 165,100t from Saudi Arabia & UAE currently at sea. (Indicative estimates; specific parcel sizes not publicly confirmed.)
Ammonium Sulphate
99% of Australia's amsul imports (579,500t) came from China in 2025. Stocks are low after a rush of demand from growers seeking urea alternatives.
04 — Specialty Market
Specialty, Amenity &
Horticultural Segments
Australia's specialty fertiliser market—encompassing controlled-release (CRF), slow-release (SRF), water-soluble, and liquid products—was on a strong growth trajectory before the conflict. Import volumes grew 33.1% from 2023 to 2024. The Australian horticulture sector has a gross production value of approximately A$14–15 billion.
Specialty Fertiliser Market Segments
Product type breakdown & growth profile
Source: 6Wresearch, Fortune Business Insights, MarketsandMarkets
Horticultural Crops
Vegetable and fruit growers face the most acute pressure. Production costs up 25%+ over four years. AusVeg reports "limited capacity to absorb the shock" with already-tight margins.
Turf & Amenity
Golf courses, council parks, and sports grounds tend to be more price-inelastic. CRF products (Osmocote, Multicote) are premium-priced, and buyers typically maintain spending. But raw material costs will flow through.
Field Crops
Broadacre farmers preparing for winter cropping (April sowing) are "extremely concerned" about urea shortages. Crop quality and quantity are both at risk. Farmers are "price takers"—they pay what they must.
Application by Crop Type
Specialty fertiliser demand distribution
Source: 6Wresearch Australia Specialty Fertilizer Market Report, Mar 2026
05 — Supply Chain
Global Cascade
of Disruption
The crisis extends far beyond urea sitting in Gulf ports. India has cut gas supply to its fertiliser sector. China is restricting exports. Southeast Asian producers are sold out. The entire global supply chain is under simultaneous stress.
India
-800,000 t/mo
India has limited gas supply to fertiliser sector to 70–75% of typical needs, slashing urea output. Over half of India's natural gas imports came from the Middle East.
China
Exports Blocked
China imports ~45% of crude and 25–30% of LNG from the Middle East, plus half its 9.6Mt sulphur imports. Chinese urea exports are "unlikely to be available in the near future."
Southeast Asia
Sold Out for March
Most SE Asian producers are sold out. Vessels take 2–3 weeks to reach Australia's east coast. Australia imported 1.2Mt of urea from the region in 2025 (32% of total).
Restart Risk
Weeks, Not Days
Even if Hormuz opens tomorrow, restarting production and transport for fertilisers and their components could take weeks—at a critical moment for planting. (Carnegie Endowment)
06 — Timeline
Three Weeks of
Escalating Crisis
28 Feb 2026
US & Israel launch coordinated strikes on Iran
Strikes target Tehran and military sites. Strait of Hormuz closes to most commercial shipping.
1–3 Mar
QatarEnergy halts some chemical/LNG output
Ruwais plant suspends production. Gulf fertiliser exports freeze.
5 Mar
Argus Media exposes Australia's urea import reliance
Reports 64% of Australian urea from Persian Gulf; domestic stocks last until mid-April.
5–10 Mar
India & Bangladesh shut fertiliser plants
India limits gas to fertiliser sector (-800,000 t/mo). Bangladesh shuts factories entirely.
10 Mar
Australian urea offers breach A$1,000/t
Domestic delivered urea surpasses A$1,000/t fca Geelong. Ammonium sulphate stocks depleted.
12 Mar
Carnegie & NYT warn of global food crisis
"It's not just oil"—fertiliser, helium, and sulphur disruptions mount. Urea-to-corn price ratio nears records.
17 Mar
Global urea hits US$720/t (+50%)
Argus assesses urea fob Egypt at US$720/t, up from US$482.50 pre-war. Ammonia at US$600/t (+24%).
21 Mar
Crisis ongoing — no resolution in sight
Australian winter cropping window opens in weeks. Supply shortfall could downgrade entire crop quality and reduce planting.
07 — Outlook
What Happens Next
Bear Case
- • Strait remains closed through April–May; Australian urea stocks depleted entirely
- • Winter cropping severely curtailed; crop quality downgrades across wheat, barley, canola
- • CRF/SRF manufacturers face raw material shortages; specialty product prices rise 30–50%
- • Inflation exceeds 5%; grocery prices rise significantly by Q3–Q4 2026
Base Case
- • Hormuz partially reopens by late April; prices remain elevated but begin to stabilise
- • SE Asian and Omani supply partially fills gap; Australian farmers absorb 15–25% cost increase
- • Specialty/amenity segment partially shielded by higher margins and price inelasticity
- • Reduced but adequate winter crop; food price impact moderate (2–4% at shelf)
Segment-Level Risk Assessment
| Segment | Supply Risk | Price Impact | Margin Buffer |
|---|---|---|---|
| Field Crops (Broadacre) | Critical | +20–50% | Very Low |
| Horticulture (Vegetables) | High | +15–30% | Low |
| Horticulture (Fruit/Tree) | Moderate | +15–25% | Moderate |
| Turf & Amenity | Moderate | +10–20% | Higher |
| CRF/SRF Products | Moderate–High | +15–30% | Higher |