Fertilizers: watching Brazil’s daily prices for warnings of potential global food inflation

It’s not just fossil fuels: the implications of the Persian Gulf conflict extend to fertilizers — a key expense for farmers and a potential threat to food affordability around the world.

The closure of the Straits of Hormuz affects about a third of the global trade in nitrogen fertilizers, which had become a key industry in Gulf countries seeking to make use of cheap and abundant gas reserves. (Making nitrogen fertilizer requires large amounts of gas-derived hydrogen; the conflict is also depriving non-Gulf fertilizer producers of gas supplies that would normally arrive on LNG vessels.)

To observe how the global fertilizer industry is reacting to the disruption, we can consider high-frequency figures from the agricultural powerhouse of Brazil as a proxy.

As our chart shows, Brazil’s daily import prices* track the World Bank’s global fertilizer price index over the long term. The natural-gas crisis that followed Russia’s 2022 invasion of Ukraine is notable for the highly inflationary effect it had on fertilizer; prices eventually retreated, and since late 2023 farmers had generally been able to benefit from stable pricing.

We have highlighted how prices had been ticking higher in early 2026. The most recent World Bank figure does not reflect the impact of the conflict, but daily Brazilian prices have jumped in March.

To see what’s happening to food inflation so far, we’re revisiting our global CEIC Food Price Index, which mimics a monthly measure from the United Nations in near-real time. Global food inflation was already picking up before the conflict broke out, but has continued to accelerate. Higher price pressures are being observed in the fats and oils segment (a proxy for vegetable prices), livestock and cereals.

We can consider the lessons of 2022 by looking for the timing of “pass-through” effects in Brazil. As our third chart shows, imported fertilizer price spikes were consistent with more expensive food in early 2022. An index of Sao Paulo grocery prices has seen an uptick in March of this year.

Our granular data for Brazilian trade also breaks down imports by type of fertilizers. The nitrogen-based fertilizers most affected by the current crisis are most important for boosting yields, while other categories have different importance and are specialties of countries far from the Gulf (such as Canada for potash and Morocco for phosphates).

Brazil is the largest importer of potash, which enriches its low-potassium soils.

We’ve added a series of companion charts to show how Brazil’s import prices correlate with different categories of fertilizer on the global market.

*Brazil provides foreign trade exports and imports in weekly frequency for major commodities, measured by value, volume and average prices.