（Singapore, 25.07.2026）In 2026, global grain markets are simultaneously grappling with three major pressures: the shipping halt in the Strait of Hormuz cutting off fertilizer supplies, the ongoing Russia-Ukraine conflict disrupting Black Sea grain shipments, and the El Niño phenomenon threatening harvests in major producing regions. “The next food crisis is approaching,” warned Maximo Torero, Chief Economist of the Food and Agriculture Organization (FAO).
Fertilizer Shortage Transmits to Grain Prices
The Strait of Hormuz is one of the world’s most critical energy and fertilizer transport routes. In 2024, approximately 18.5 million tonnes of urea passed through the strait, accounting for 34% of global urea trade. The Gulf region also accounts for 23% of global ammonia trade and 18% of phosphate fertilizer trade, with nearly 50% of sulfur — a key raw material for phosphate fertilizer production — also shipped via this route.
Since the outbreak of hostilities in the Middle East in late February, fertilizer vessels passing through the strait have ground to a near halt. Hundreds of vessels have remained stranded in the Gulf region due to security risks, with commercial shipping brought to a virtual standstill. Natural gas facilities in the region have been partially shut down, fertilizer plants have suspended production, and some installations have sustained damage.
The fertilizer supply crunch has quickly transmitted to agricultural input and energy prices. FAO data shows that since the conflict began, international urea prices have surged 55%, oil prices 50%, natural gas prices 25%, while freight and fuel costs have risen approximately 43% and 58%, respectively. U.S. government data indicates that global fertilizer prices rose more than 20% year-on-year in June 2026, with nitrogen fertilizer prices jumping 46%.
On the other hand, the deeper impact of the fertilizer shortage carries a time lag. Fertilizer must be applied at specific stages of crop growth cycles; if not delivered in time, yields will decline. Analysts suggest that while the market is currently focused on input prices, the real impact will be felt in this year’s autumn planting and next year’s harvest.
The effect of rising fertilizer costs will continue to transmit down the industrial chain. As fertilizer-importing countries’ stockpiles are steadily released, the supply gap is spreading from trade channels to agricultural production. A Goldman Sachs research report notes that fertilizer accounts for approximately 20% of grain production costs, and rising costs will directly squeeze planting profitability.
At the individual level, some farmers have begun reducing fertilizer applications or shifting from high-fertilizer-intensity crops such as corn to lower-intensity crops like soybeans. Such shifts in planting decisions will further tighten grain supply. Some Australian farmers have indicated they are considering reducing next season’s planted area, as wheat prices are struggling to cover the rising costs of fertilizer.
At the national level, some countries have begun implementing export restrictions or import subsidies, which could further push up international fertilizer prices in the short term and intensify supply tightness. The International Food Policy Research Institute notes that fertilizer supply chains are even more fragile than grain trade itself — once upstream disruption persists, its impact will gradually cascade along the agricultural value chain and ultimately transmit to global food prices.
Zixin Group Holdings Executive Chairman Liang Chenwang is closely monitoring the risks of rising agricultural input costs. In his view, the risks facing agricultural companies never stem from a single link alone, but represent systemic challenges across the entire industrial chain. When rising agricultural input costs are compounded by variables such as climate anomalies and concentrated production bases, the uncertainty surrounding raw material supply and price fluctuations becomes significantly amplified.
Black Sea Tensions and Extreme Heat Add Pressure
Beyond fertilizer supply constraints, the Black Sea situation continues to tighten global grain supply. More than a quarter of global wheat exports originate from the Black Sea region. Escalating military actions between Russia and Ukraine, along with frequent attacks on ports and commercial vessels, have thrown wheat export shipping lanes into turmoil. Data from the Ukrainian Agricultural Council indicates that Ukraine’s capacity to export grain through Black Sea ports has declined by approximately one-third. Novorossiysk port, which handles one-third of Russia’s grain exports, has also implemented night-time navigation restrictions due to drone attack risks.
Meanwhile, extreme heat in the Northern Hemisphere is further heightening uncertainty in agricultural production. Since late May, France — the European Union’s largest agricultural producer — has endured three heatwaves. The French Ministry of Agriculture projects 2026 soft wheat production at 32 million tonnes, down 4% from 2025 and approximately 2% below the five-year average. U.S. wheat planted area has contracted 6% year-on-year, marking the lowest level since 1970.
With multiple supply-side risks accumulating, markets broadly expect international grain prices to see further upward room. The Bloomberg Agriculture Spot Index has risen to its highest level since July 2023.
In the face of overlapping risks — disrupted fertilizer trade, geopolitical conflicts, and climate anomalies — Zixin Group, a company listed on the Singapore Exchange’s Catalist board with 17 years of deep experience in agriculture, relies on the stability of its industrial chain to navigate external uncertainties.
Liang Chenwang believes that stabilizing total grain supply can effectively counter sharp grain price fluctuations. Boosting per-unit yields, improving crop varieties, and activating arable land can help ease short-term tightness when external supplies tighten. However, he cautions that if companies pursue short-term output alone without the support of a resilient industrial chain, the risks become evident when external shocks hit — soil fertility depletion, over-reliance on agrochemicals, and a monoculture planting structure make high yields unsustainable.
Liang further stated: “Long-term food security lies in building complete industrial chain resilience from upstream to downstream. Upstream, stress-resistant breeding and contract farming secure the foundation of supply; midstream, warehousing and preservation reduce post-harvest losses; downstream, smooth distribution channels and stable farmgate prices sustain farmers’ planting incentives over the long term.”
