Middle Eastern conflict impacts Southeast Asian agriculture, "The Indian government repeatedly assures, but panic continues to spread"

[By/Observer Network Wang Kaiwen]

After shipping in the Strait of Hormuz was disrupted, the impact has not been limited to oil and natural gas. The fertilizer supply chain has also been badly hit. This has left South Asian countries that rely heavily on fertilizer imports from the Gulf region feeling especially anxious.

A report by the British newspaper The Guardian on April 4 said that farmers in India and Sri Lanka have already felt the ripple effects caused by shortages of oil and fertilizer. Although officials have repeatedly claimed that inventories are sufficient, panic is spreading.

Gurvinder Singh, a 52-year-old Indian farmer, never thought that Iran’s war would reach the land he farms in Punjab.

Singh owns a small farm in Punjab, a province often dubbed “India’s granary,” where he rotates between growing wheat and rice. The conflict, thousands of miles away, has left him extremely worried—he can’t bring himself to think about what this season’s rice harvest will turn out to be.

“We’re already struggling on thin margins,” Singh said. “If we can’t get fertilizer, yields will drop. This will not only affect my entire family, but also the whole region, because we rely entirely on agriculture.”

“We’re praying this war ends soon, because in the end it will bring trouble to us as well.” Singh said.

In North India, a farm worker applies fertilizer in the fields. Al Jazeera website

More than a month ago, the United States and Israel launched military strikes against Iran. As retaliation, Iran decided to blockade the world’s key shipping lane, the Strait of Hormuz. This has disrupted the transport of oil and natural gas for Gulf countries, throwing global energy markets into turmoil.

Analysts warn that the impact of blockading the Strait of Hormuz will soon go far beyond a surge in oil prices and could even deal a devastating blow to global food security.

According to reports, about one-third of the world’s seaborne fertilizer trade depends highly on the Strait of Hormuz. Once shipping is disrupted, the impact will quickly spread to farmland. The World Food Programme estimates that if the fighting in the Middle East is still not over by June, the world could see nearly 45 million more people fall into severe hunger.

Experts say South Asian countries such as India and Sri Lanka are especially vulnerable because they rely heavily on imported fertilizers, as well as imported natural gas and fuel needed for agriculture.

The report notes that India is the world’s second-largest fertilizer consumption country, with annual consumption exceeding 60 million tons. Most of its finished products and raw materials typically come from Gulf countries and are transported via the Strait of Hormuz.

In countries like India, the ripple effects triggered by shortages of natural gas and fertilizer may last for months. This affects the types of crops farmers can plant and their yields, and may ultimately lead to insufficient stocks of key agricultural products such as rice.

Meanwhile, farmers’ ability to irrigate, harvest, process, store, and transport crops will also be hit hard by shortages of oil and diesel, as well as soaring electricity prices—further heightening external concerns about food shortages.

According to reports, from 2023 to 2024, India spent more than 1.8 trillion rupees (about RMB 133.6 billion) on fertilizer subsidies. This huge figure underscores the importance of fertilizer to Indian farmers, and also means that the agricultural sector is extremely sensitive to price shocks worldwide.

Indian agricultural economist Devind Sharma said that early signals show that the war has tightened supplies and raised costs, and these pressures have already been passed on to farmers. “Indian agriculture still relies heavily on fertilizer, and any disruption in supply will quickly trigger anxiety,” he said.

The fighting in the Middle East has already put pressure on the supply chain. Indian farmers say they are especially worried about the supply of urea. This nitrogen fertilizer is widely used as a core input in Indian agriculture, with annual consumption of about 35 million to 40 million tons. While most urea is produced domestically in India, its production relies heavily on imported natural gas. And currently, India’s natural gas supply is already quite tight; the gas supplied to fertilizer plants has been cut by 30%.

In major grain-producing areas such as Punjab and Haryana, local farmers say the direct impact of the situation in Iran has not yet fully shown, but panic is already spreading. Procurement of India’s autumn-sown crops usually starts in May, before planting crops such as rice and cotton in June and July. This means farmers’ window is already very short before fertilizer shortages truly affect yields.

According to reports, rice production during India’s summer planting season is about 100 million tons. Farmers typically buy fertilizer within the following 15 to 20 days, but now many people are stockpiling in advance.

“I’ve been in this business for 35 years, and I’ve never seen such panic,” said Prakash Limbua Swami, a fertilizer retailer in Hubli, Karnataka.

Earlier reports had said that several fertilizer plants in India were facing natural gas shortages. However, India’s officials have insisted that fertilizer plants are operating normally and that buffered inventories are higher than last year.

“Right now, our inventories are greater than last year, which shows that supply conditions are good,” said Aparna S. Sharma, a senior official at India’s Ministry of Chemicals and Fertilizers. She also said that India’s procurement channels are moving from traditional Gulf suppliers toward diversification.

On March 23, India’s Prime Minister Modi told Parliament that the government has made adequate arrangements for fertilizer supply during the summer sowing season, “with diversified options for fertilizer imports as well as for oil and natural gas imports.” Modi also encouraged Indian farmers to adopt natural farming methods.

Indian Prime Minister Modi. Indian media

Despite repeated assurances from the Indian government, farmers’ anxiety is still ongoing. “The reality is that no one has much confidence,” Al Jazeera website said bluntly.

In Indian-controlled Kashmir, Ghulam Rasul, a 53-year-old mustard grower, said that fertilizer prices have risen faster than fertilizer supply disruptions. “We hear news about the war, we hear news about shipping problems, and even before shortages happen, fertilizer has already gone up in price,” Rasul said.

He added that in such circumstances, even if fertilizer has not yet shown up as short, farmers usually take measures in advance—reducing the amount of fertilizer used. “If we use less, yields will fall, but sometimes we have no choice.”

The Guardian noted that many small farmers in India are already operating at a loss and carry heavy debt. Although the government provides large subsidies for crops, agricultural experts have long argued that the system has structural problems and is full of exploitation.

“Because of the panic, the farmers around me have started stockpiling fertilizer, even though its shelf life is limited,” said Tejveer Singh, a farmer in Anbarala, Punjab. “Any shortage will affect our productivity. Farmers are already under pressure from rising costs, and this will be a major blow.”

In Sri Lanka, there is also intense concern that fertilizer for key crops will run out. Less than five years ago, farmers in the country also faced a similar situation: at that time, an economic crisis left Sri Lanka unable to buy imported fertilizer, leading to severe economic losses and serious shortages of basic agricultural crops.

According to a United Nations report, if the conflict in the Gulf region continues and keeps obstructing fertilizer supplies, Sri Lanka will become one of the most vulnerable countries after Sudan.

Anuradhа Thananok, chair of Sri Lanka’s “National Agriculture Unity Front,” warned that the fertilizer crisis Sri Lanka is about to face is even more severe than its fuel crisis. “The government and officials have been saying there is enough fertilizer. That’s a big lie. There is no inventory at all,” he said. “If the second season (May to August) harvest is affected, there will be serious food security problems. When food security can’t be guaranteed, it will pose a threat to national security.”

In Polonnaruwa in central Sri Lanka, a farmer named Ranjit Hulugale said that the fertilizer inventories in his area have already hit rock bottom, and prices are almost doubled.

“As a farmer, within a month we will face a huge crisis,” he said in despair. “By then, this country will face a food crisis.”

This article is an exclusive piece from Observer Network. Without authorization, it may not be reproduced or reposted.

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