By Nana Karikari, Senior Global Affairs Correspondent
The World Bank released a stark warning in its latest Commodity Markets Outlook, projecting a 31% increase in global fertilizer prices for 2026. This surge marks a dramatic reversal from previous easing trends and is primarily driven by escalating conflict in the Middle East. Analysts report that the fertilizer price index rose by more than 12% in the first quarter of 2026 alone, reaching levels not seen since the 2022 global energy crisis.
“Fertilizers have not been this unaffordable since 2022, eroding farmers’ incomes and threatening future agricultural yields,” the World Bank stated in its report.
Supply Chain Bottlenecks in the Strait of Hormuz
The primary driver for the price spike is the disruption of critical maritime trade routes. Approximately one-third of the global seaborne fertilizer trade, totaling about 16 million tons annually, passes through the Strait of Hormuz. Recent hostilities and logistics friction in the Persian Gulf have led to significant congestion at export ports and a sharp rise in freight rates. This bottleneck has transformed freight from a background cost into an active mechanism of price enforcement, particularly for nitrogen-based products.
Urea Prices Reach Four Year Highs
Urea, the world’s most widely used nitrogen fertilizer, is at the epicenter of the current market shock. Prices for granular urea jumped 53.7% month-on-month in March 2026, reaching $725.6 per ton. The World Bank projects that urea prices could close the year 60% higher than 2025 levels. Because natural gas accounts for 80% to 90% of ammonia production costs—the primary input for urea—the parallel 24% spike in energy prices has created a punishing cost structure for manufacturers.
“If such risks materialize, average urea prices in 2026 could exceed the 2022 average of $700/mt—the second-highest level in real terms after 1974,” the World Bank warned.
Growing Risks to Global Food Security
The increase in input costs is expected to have a delayed but powerful impact on global food supplies. As fertilizer becomes less affordable, farmers in both developed and developing nations may reduce usage, leading to diminished crop yields in the 2026–2027 season. The World Food Programme warns that if the conflict remains prolonged, these pressures could push up to 45 million more people into acute food insecurity this year.
“Rising commodity prices caused by these shocks will increase inflation and dampen growth worldwide,” the World Bank noted, highlighting that inflation in developing economies is now projected to average 5.1% in 2026.
Ghana’s Strategic Pivot: Free Fertilizer for 2026
In response to these global shocks, the Government of Ghana has announced a major policy shift to protect domestic food security. For the 2026 farming season, Ghana will replace its existing subsidy program with a full free distribution scheme for fertilizers. President John Dramani Mahama directed the Ministry of Agriculture to distribute secured stocks at no cost to farmers to cushion them against the “perfect storm” of rising input prices and previous harvest losses. While Ghana’s fertilizer usage reached 28.9 kg per hectare in 2023, the government aims to use this intervention to finally reach the 50 kg/ha target set under the Abuja Declaration.
A Continental Push for Fertilizer Sovereignty
The crisis has intensified the urgency for African fertilizer self-sufficiency. Under the African Union’s Nairobi Declaration, the continent is moving to triple domestic production by 2034 to reduce reliance on vulnerable shipping lanes like the Strait of Hormuz. Industrial giants in Morocco and Nigeria are scaling up capacity, with Morocco’s OCP Group and Nigeria’s Dangote Group positioning as critical buffers against global volatility. However, the African Development Bank warns that even a 10% reduction in fertilizer availability could slash yields of staples like maize and rice by 25% across Sub-Saharan Africa.
Economic Outlook and Regional Vulnerabilities
Net food-importing and lower-income economies remain the most vulnerable to these shocks. In nations like Brazil, which imports approximately 80% to 90% of its fertilizer, the volatility directly threatens agricultural productivity and national economic stability. While the World Bank expects a potential 25% decline in prices by 2027 should geopolitical tensions ease, the immediate forecast remains grim. Indebted nations face a “perfect storm” of rising interest rates, higher food bills, and increased fiscal pressure from agricultural subsidies.
Indermit Gill, the World Bank’s Chief Economist, emphasized the human cost of the crisis: “All this reminds us of a bitter truth: war is development in reverse.”
Navigating the Path to Stability
The current volatility underscores the fragility of a global food system heavily dependent on concentrated energy corridors and geopolitical stability. While the World Bank suggests that a de-escalation of conflict could normalize markets by 2027, the immediate challenge for policymakers lies in balancing fiscal restraint with the urgent need to support agricultural inputs for the world’s most vulnerable regions. Ultimately, the stability of global food prices will depend not only on market mechanics but on the diplomatic resolution of the tensions currently constricting the world’s vital trade arteries.
