The world produces enough food for 8.2 billion people, but here’s the catch: it’s not adequately distributed or available to everyone. The Iran war, now entering the fourth week, could exacerbate matters as much of the urea used as fertiliser is produced in the Gulf.
According to an Al Jazeera report, “nearly half of the world’s traded urea and large volumes of other fertiliser are exported from Gulf countries through the Strait of Hormuz.”
All that is now disrupted because of the war, and since fertiliser is needed to produce food, there could be a food shortage if the war doesn’t end soon. Qatar Fertiliser Company alone accounts for 14% of the world’s urea (5.6 million tons + 3.8 mn tons of ammonia). That is now reported shut.
China, among the world’s largest fertiliser exporters ($13 billion last year), has suspended overseas shipments of nitrogen and potassium fertiliser blends — urea and NPK mixes, effective immediately. The suspension was done in anticipation of shortages and the need to protect the domestic market.
The infection is spreading. Bangladesh shuttered four of its five fertiliser factories. The US is reported to be nearly 25% short of its fertiliser requirements. India, which procures most of its fertiliser from the Gulf region, could be in trouble. Shipping industry experts have warned that with the crop sowing season to start soon, the government needs to find a solution to the fertiliser shortage quickly.
GCC countries import approximately 85% of their food, with dependence rising to nearly 100% for rice and 90% for cereals. Around 70% of those food imports transit the same strait now paralysed by the Iran war.
The UAE holds four to six months of strategic reserves of food; Saudi Arabia purchased nearly a million metric tonnes of wheat in January. These are buffers bought with considerable fiscal firepower. There may be no immediate problem, but it’s there on the horizon.
