FAO Warns Gulf Fertilizer Disruptions Compound Global Food-Inflation Risks

Analysis

On September 24, the head of the UN Food and Agriculture Organization told ministers that the Gulf supplies 30 to 35 percent of global urea, 50 percent of sulfur exports and 20 to 30 percent of ammonia, and that 1.5 to 3 million tonnes of fertilizer trade a month had been delayed. The figures below are his, as of that date. September monthly averages published afterward show a split: phosphate fertilizer is well above its 2025 average, while the World Bank's urea series is below it. Because those averages cover the full month, they are not a post-speech price reading.

The one-minute reading

The Gulf is important to food prices because fertilizer begins with energy and industrial feedstocks. The FAO's director-general said the region supplies 30–35 percent of global urea, 50 percent of sulfur exports and 20–30 percent of ammonia, while 1.5–3 million tonnes of fertilizer trade a month had been delayed.

The price evidence is mixed. The World Bank's September averages put DAP phosphate fertilizer 16.8 percent above its 2025 average and its overall fertilizer index 6 percent higher, but urea 3.6 percent lower. A disruption can affect products differently because nitrogen fertilizer relies on natural gas and ammonia, while phosphate production needs sulfuric acid made from sulfur. Higher costs reach food with a lag if farmers buy less fertilizer and later harvests suffer. The assessment would worsen if shipping delays persist into planting decisions and benchmark and importer prices rise together. Normalized Gulf shipments and stable fertilizer purchases would support the counter-case.

The five-minute analysis

Fertilizer connects Gulf energy infrastructure to grocery prices through two different production chains. Nitrogen fertilizer starts with natural gas, which is converted into ammonia and then into urea. Phosphate fertilizer needs sulfuric acid, made from sulfur that is often recovered during oil and gas processing. A disruption can therefore constrain both finished fertilizer and a feedstock used by producers elsewhere.

On September 24, FAO Director-General Qu Dongyu told ministers that the Gulf supplies 30–35 percent of global urea, 50 percent of sulfur exports and 20–30 percent of ammonia. He also said 1.5–3 million tonnes of fertilizer trade each month had been delayed and that DAP, a phosphate fertilizer, had risen 26 percent. The statement did not specify the period for that increase or whether “supplies” meant production or exports in every case.

Official September averages published later show why the details matter. The World Bank's October Pink Sheet priced DAP at $800.6 a tonne, 16.8 percent above its 2025 average of $685.2. Potassium chloride was 5.8 percent above its 2025 average and the fertilizer index was 6 percent higher. Yet the urea series, priced free on board in the Middle East, averaged $407.5 a tonne, 3.6 percent below its 2025 average.

Those figures do not disprove the FAO warning. A monthly benchmark blends conditions across the whole month and may not match the price paid by a particular importer. The FAO's 26 percent DAP figure may use a different period or series. The split instead shows that a large Gulf supply share does not make every fertilizer price rise together or immediately.

The food-price mechanism takes time. If shipping delays reduce available ammonia, urea or sulfur, importers may pay more or receive less. Farmers facing higher fertilizer costs can absorb them, switch products, reduce application or plant differently. Lower application may affect yields at the next harvest rather than today's food supply. Smaller harvests can then raise food prices, with the greatest strain in countries that combine food and fertilizer import dependence with limited foreign-exchange reserves, high debt and weak fiscal space.

The FAO Food Price Index for September was 136.0, 1.5 percent above August and 5.8 percent above a year earlier. Cereals were up 17.2 percent and sugar 14.7 percent from a year earlier, while dairy was down 19.1 percent. Those movements also reflect weather, crops, energy costs and trade policy. The index cannot assign the change to Gulf fertilizer disruption.

The counter-case is that shipping recovers before planting decisions change, importers draw on inventories or alternative suppliers, and fertilizer benchmarks remain divided rather than rising broadly. The evidence would become more concerning if Gulf fertilizer and sulfur delays persist, importer prices rise alongside benchmarks, and planting-season purchases or application rates weaken. Normalized shipments, stable purchases and easing phosphate prices would reduce the risk.

The next useful observations are the FAO's October food index, the next World Bank Pink Sheet, Gulf fertilizer and sulfur shipments through the Strait of Hormuz, and planting-season purchases in import-dependent countries. The present evidence establishes exposure and delay, not the size of any eventual harvest or food-price effect.

Timing will determine whether the shock travels through the whole chain. A short delay can be absorbed through inventories, rescheduled cargoes or purchases from another supplier. A delay that reaches a planting window can change how much fertilizer farmers apply, making the next harvest the relevant test. Even then, fertilizer is only one input: weather, crop conditions, fuel, currencies and trade policy can amplify or offset it. That is why the FAO index and World Bank benchmarks should be read alongside physical shipment and planting data, not used alone to attribute food inflation to the Gulf disruption.

What the FAO said

FAO Director-General Qu Dongyu addressed the second ministerial meeting of the Rome Coalition for Fertilizer Access and Food Security, held during the UN General Assembly. His statement said:

The Gulf supplies 30–35% of global urea, 50% of sulfur exports and 20–30% of ammonia.

1.5 to 3 million tonnes of monthly fertilizer trade were delayed.

DAP (a phosphate fertilizer) prices rose 26%.

The FAO Food Price Index rose 1.9% in August.

Missing details. The statement does not say what period the 26% DAP rise covers. It also does not say whether "supplies" means share of world production or share of world exports. Those are different denominators, and the statement mixes them ("sulfur exports" but "global urea").

What the September data show

Food prices. The FAO Food Price Index for September, released October 2, was 136.0 points: up 1.5% from August and 5.8% from a year earlier. Cereals were up 17.2% and sugar 14.7% year on year. Dairy was down 19.1%.

Fertilizer prices. The World Bank's October Pink Sheet gives these September 2026 prices:

DAP: $800.6 a tonne, against a 2025 average of $685.2 (+16.8%).

Urea (World Bank "E. Europe" series, priced FOB Middle East): $407.5 a tonne, against $422.7 (−3.6%).

Potassium chloride: $367.5 a tonne, against $347.5 (+5.8%).

World Bank fertilizer index (2010 = 100): 147.0, against 138.7 (+6.0%).

In these series, DAP is up about 17% on the 2025 average, not 26%. The FAO figure may cover a different period or price series. The urea series is below last year's average despite the Gulf's large share of urea supply. A single benchmark may not reflect prices paid by importers that depend on Gulf cargoes.

Asymmetric Analysis: how fertilizer reaches the dinner table

There are two separate supply chains:

1. Nitrogen. Natural gas is turned into ammonia, and ammonia into urea. Because the Gulf accounts for a large share of supply in the FAO statement, a shipping disruption can remove a substantial volume from the traded market. 2. Phosphate. Sulfur is a by-product of oil and gas processing. It is turned into sulfuric acid, which is needed to make phosphate fertilizers such as DAP. If half of world sulfur exports are disrupted, phosphate producers elsewhere can face higher costs even if their own phosphate rock is unaffected.

Higher fertilizer costs can reach food prices with a lag. Farmers may apply less fertilizer, which can affect yields at the next harvest rather than immediately. The FAO identified countries combining high food and fertilizer import dependence with limited foreign-exchange reserves, high debt and weak fiscal space as the most vulnerable.

What will drive food prices next

The FAO's September 24 assessment describes substantial Gulf supply exposure. The World Bank's September averages show how differently fertilizer benchmarks have moved: phosphate prices climbed while urea remained below its 2025 average. The FAO's reported 26% DAP increase uses a price window or series that its statement did not specify.

Food inflation also responds to weather, crop conditions, energy costs and trade policy. The decisive question now is whether fertilizer shipping disruptions persist long enough to affect planting decisions and the next harvest.

What we're watching

The FAO Food Price Index for October (due November 6), the next World Bank Pink Sheet, Gulf fertilizer and sulfur shipments through the Strait of Hormuz, and planting-season fertilizer purchases in import-dependent countries.

Sources

FAO: Director-General statement, Rome Coalition ministerial meeting, Sept 24 ; FAO Food Price Index (Oct 2 release) .

World Bank: Commodity Markets ; Pink Sheet, October 2026 .

Statements by officials are reported as their own claims.