The Iran conflict has disrupted global fertiliser trade, with flows through the Strait of Hormuz — which handles roughly one-third of global volumes — effectively halted. The bottleneck has already unsettled major consumers. China has moved to release fertilisers from its national reserves while tightening export controls to safeguard domestic supply. Meanwhile, Russia, which accounts for up to 40% of global ammonium nitrate trade, has temporarily halted exports until April 12.
For dry bulk, the first-order impact is on the fertiliser cargoes themselves. Around 35% of the global fertilizer trade is transported on Handysizes, 45% on Supramaxes, with the remainder largely on Panamaxes. If a proportionate volume of fertiliser supply is effectively trapped within the Arabian Gulf, or if major producers begin retaining volumes for domestic use, the immediate outcome would be a reduction in export stems — particularly affecting the smaller bulk segments that dominate this trade.
Fertilisers are a key input for crop production, and this is where the second-order effects start to rear its ugly head. Farmers are now being squeezed from both sides: fertiliser is becoming more expensive and harder to source, while diesel prices have also surged, raising the cost of fieldwork, irrigation, inland logistics, and harvesting. News reports have indicated that diesel tightness in Australia is already disrupting farming operations due to rationing concerns, with rising inland freight costs driving Australian wheat prices to a 20-month high.
With fertiliser prices elevated, farmers are left with limited options — delay planting, switch to cheaper fertiliser alternatives, or pivot towards crops that require lower nutrient input. In the United States, there are already indications that acreage may shift away from fertiliser-intensive crops such as corn toward alternatives like soybeans. In Australia, wheat farmers are considering planting less wheat in favour of barley, pulses, and oilseeds. In Brazil, higher urea prices have encouraged buyers to turn to cheaper substitutes such as ammonium sulphate.
Corn appears to be the most exposed. It is one of the most fertiliser-intensive crops and therefore most likely to see acreage shifts. More importantly, key exporters are either approaching or currently in their planting windows — the United States and Ukraine begin planting in April, while Brazil’s second crop planting is already underway. Together, these countries account for roughly 70% of global corn exports. Argentina, which contributes around 20%, plants later in the year (September–November), and while it is less exposed in the near term, the broader issue remains that a significant portion of global corn supply could be affected if fertiliser constraints persist.
Wheat presents a similar but more moderated risk. Major producers — Russia, Canada, Australia, and the United States — enter their planting season between April and May, accounting for about 61% of global exports. However, wheat could face less dire consequences due to the fact that Russia and Canada are key fertiliser exporters, particularly of potash, and may be better positioned to prioritise and leverage their own domestic fertiliser supply. As such, the share of wheat production at risk is likely closer to 24% — materially lower than corn, but still significant.
Ultimately, while second-order impacts on grains will take time to materialise and remain dependent on multiple variables, the direction of risk is becoming clearer. A meaningful disruption to corn and wheat production in the 2026–27 harvest cycle could tighten global balances. If realised, this could not only dampen overall grain trade flows but also reshape trade patterns — with potentially significant implications for dry bulk tonne-mile demand and routing.