It’s not just oil: Iran war also threatens Asia’s food security

It s not just oil – As the rice planting season began in Southeast Asia, Suchart Piamsomboon, a 60-year-old farmer from Thailand’s Chachoengsao province, faced a difficult choice. The local fertilizer store was empty, with no stock available for purchase. When asked if he would proceed with planting, he hesitated. “I’ve decided not to do it,” he said. “Farming only leads to financial losses. I’d rather work as a day laborer and earn 100 to 200 baht daily just to survive.” His frustration stemmed from rising costs: a sack of fertilizer now priced at over 1,100 baht, compared to 800-900 baht just a month earlier. By the time he returned home, rumors spread that prices could climb to 1,200 baht. For Piamsomboon, the decision was clear. The war in Iran, far from the fields he tills, had already disrupted his livelihood.

The Fertilizer Crisis Unfolds

The immediate catalyst for this dilemma was the conflict between the United States and Israel, which erupted on February 28. The Strait of Hormuz, a vital maritime corridor, became a focal point. This narrow waterway channels approximately one-third of the world’s seaborne fertilizer trade, making its closure a significant blow. Countries reliant on Persian Gulf imports, including major Asian economies, found themselves in a precarious position. Within weeks, the price of urea—a primary nitrogen fertilizer—surged by more than 40%, directly affecting farmers’ budgets. The crisis highlighted how global events can ripple into everyday agricultural practices, even in regions far from the war zone.

China, the world’s largest fertilizer producer, further exacerbated the situation. Last year, the nation accounted for 25% of global fertilizer output and exported over $13 billion worth of it. However, in March, Beijing imposed a ban on exports of several key fertilizers, a move that disrupted supply chains. Since 2021, China had gradually tightened its export regulations, restricting between 50% and 80% of its fertilizer shipments. This policy shift, combined with the Hormuz closure, created a perfect storm for global markets. Farmers in Southeast Asia, once assured of steady fertilizer supplies, now grapple with uncertainty.

China’s Strategic Export Controls

China’s leadership has long prioritized food self-sufficiency as a political objective. A 2023 national food security law mandates that local governments integrate food production goals into their economic strategies. This approach explains the recent export bans: by limiting fertilizer shipments, the government aims to stabilize domestic prices and support its agricultural sector. For a fertilizer exporter in Shandong province, who chose anonymity, the decision was both a challenge and a necessity. “We had already received orders,” he explained. “The clients were waiting. But now we’ve been told not to ship.” He acknowledged the government’s reasoning, stating, “We understand the need to ensure enough domestic supply, so we will follow the regulations.”

The export ban has forced China to rely on ammonium sulfate, a lower-grade industrial byproduct, as its primary fertilizer export. While this substance is available in significant quantities, it cannot replace the critical role of nitrogen-based fertilizers in growing staple crops like rice. The combination of China’s restrictions and the Hormuz closure has left the global fertilizer market volatile, with supply shortages and price spikes threatening food security in Asia. Joseph Glauber, a Research Fellow Emeritus at the International Food Policy Research Institute, warned that these factors will “inevitably rattle the global fertilizer market and food security.” His comments underscore the far-reaching consequences of this crisis.

Structural Vulnerabilities in Asian Agriculture

Southeast Asia’s agricultural systems are deeply intertwined with Chinese fertilizer supply. Vietnam, a leading rice exporter, is particularly affected. The region’s dependence on China for fertilizers means that any disruption in supply has immediate and severe repercussions. With the Strait of Hormuz closed, China’s access to liquefied natural gas—a key feedstock for nitrogen fertilizers—was also compromised. This dual challenge has intensified the pressure on farmers to adapt or risk falling behind in the global market.

The ripple effects of the crisis extend beyond immediate costs. For instance, the fertilizer shortage could reduce rice yields, impacting both domestic consumption and international exports. In Thailand, the rice belt is a cornerstone of the economy, and delays in planting could lead to lower harvests. Similarly, in Vietnam’s Mekong Delta, where rice paddies dominate the landscape, the absence of essential nutrients may force farmers to prioritize income over crop production. Suchart Piamsomboon’s hesitation reflects a growing trend: as prices rise and profits shrink, many are choosing to abandon traditional farming in favor of more stable, if less rewarding, work.

Political Priorities and Economic Trade-offs

China’s decision to restrict exports is not just an economic measure but a political one. By controlling fertilizer flow, the government ensures that its own farmers have access to the resources needed to maintain food production. This strategy aligns with broader efforts to secure food independence, a goal that has gained urgency in recent years. Professor Paul Teng, a Senior Fellow in food security at the Singapore Institute of International Affairs, emphasized this point. “In China, food security is a key political issue,” he said. “Ensuring enough food for domestic consumption is not something the government is willing to compromise on.”

However, the export ban raises questions about long-term economic implications. While it protects domestic farmers, it also strains relationships with trading partners in the Asia-Pacific region. Countries like Thailand, Indonesia, and New Zealand had relied on China for consistent fertilizer supply, and the sudden halt has disrupted plans. For these nations, the loss of Chinese fertilizers has created a gap that is difficult to fill, especially as global prices remain elevated. The situation underscores the delicate balance between national priorities and international interdependence in agriculture.

The crisis in fertilizers is a reminder of how interconnected modern economies have become. What begins as a geopolitical conflict in the Middle East can quickly evolve into a challenge for global food systems. For Southeast Asia, the region’s “rice bowl” now faces an uncertain future. With planting season underway and fertilizers in short supply, the coming weeks will determine whether farmers can sustain their operations or if the region’s food production will suffer. As Suchart Piamsomboon’s story illustrates, the consequences of this crisis are felt not just in boardrooms or capitals, but in the fields and homes of millions who rely on rice as a staple.