THE FERTILIZER CRUNCH INTERVIEW
Global fertilizer supply is highly concentrated, with just a small group of countries controlling the vast majority of worldwide production, warns Ruth Hill, Director of Markets, Trade and Institutions at IFPRI By Axel Reiserer, OPEC Fund “Global food production will remain vulnerable to shocks as long as it is dependent on a handful of inputs from a few countries”
Ruth Hill
Ruth Hill is the Director of the Markets, Trade and Institutions Unit in the Food and Nutrition Policy Department at IFPRI. She was previously a Lead Economist at the World Bank, where she led work on the distributional impacts of cli- mate change, fiscal policy, markets and institutions. She also led the development of the World Bank’s Rural Income Diagnostics and con- ducted Poverty Assessments and Systematic Country Diagnostics in East Africa and South Asia. She has published widely and holds a doctorate in economics from the University of Oxford.
OPEC Fund Quarterly : Fertilizer prices have risen dramatically since the closure of the Strait of Hormuz at the end of February 2026 and the World Bank forecasts a rise of more than 30 percent this year alone. What will be the short- and long-term impacts for the most vulnerable countries? Ruth Hill: The most vulnerable countries are those that rely heavily on fertilizer imports for domestic food production, have not yet secured fertilizer supplies for the current or forthcoming seasons and cannot cushion the impact of high prices on farmers, i.e. through subsidies. The impact may be marginal in the current Northern Hemisphere season for countries that had already secured fertilizer supplies and in which farmers had already made planting decisions and input purchases. In forthcoming seasons, most immediately the main forthcoming Southern Hemisphere season, the impacts may be larger with farmers shifting away from crops with high fertilizer needs, reducing the area of crop planted in some cases and applying less fertilizer. Production may be lower as a result which would impact domestic food prices. OFQ : Is there a ceiling for these prices or can they rise indefinitely? RH: High prices are unlikely to rise indefinitely – high prices normally result in reduced demand through changing crop production decisions and reduced
application of fertilizer (reducing amounts applied or changing the mix of nutrients applied). Lower demand reduces the upward pressure on prices. But it is important to add that in large fertilizer using countries such as India, where fertilizer subsidies cushion the price impacts for their farmers, this transmission towards reduced demand will not occur. Higher prices also lead to increased exports from countries that had not previously been exporting and increased production, which can help drive down prices. However, such greenfield fertilizer projects take several years to come online so there is a limit in the amount that production can
“The most vulnerable countries are those that rely heavily on fertilizer imports for domestic food production [or] have not yet secured fertilizer supplies
increase in the short run. The duration of the high prices will depend in the short run on how long
shipments through the Strait of Hormuz are curtailed and in the medium-long term on new trade routes and increased fertilizer production elsewhere.
for the current or forthcoming seasons.” Ruth Hill
Illustration: Sugik – stock.adobe.com
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