How Global Trade Restrictions Are Quietly Reshaping the Fertilizer Industry

While headlines tend to focus on energy shortages, food inflation, and geopolitical tensions, a less visible but equally critical sector is being reshaped behind the scenes: the global fertilizer industry.

Today, farmers everywhere are still paying a premium for fertilizer because of a mix of politics and chemistry.

Trade restrictions, export controls, sanctions, and supply chain realignments have altered how fertilizers are produced, priced, and distributed worldwide. These changes are not always obvious to end consumers, but they are deeply felt by manufacturers, distributors, and farmers. Their long-term implications are only beginning to surface.

Key Ingredients, Key Players

Fertilizers sit at the intersection of agriculture, energy, and geopolitics. Nitrogen, phosphate, and potash production relies heavily on globally traded raw materials such as natural gas, sulfur, ammonia, and mined minerals. When trade flows are disrupted, fertilizer markets react quickly. Over the past several years, governments have increasingly prioritized domestic supply security over global market stability, fundamentally shifting how fertilizer moves across borders.

China provides one of the clearest examples. As the world’s largest producer of phosphate fertilizers and a major exporter of nitrogen products, China historically supplied significant volumes to international markets. However, export controls introduced to protect domestic food security have sharply reduced availability abroad. These measures were not framed as permanent bans, but their long duration has effectively tightened global supply, particularly for developing regions that relied heavily on Chinese exports. As a result, China is keeping its fertilizer where it’s needed.

Europe has taken a different but equally impactful approach. Sanctions and trade barriers imposed on Russian and Belarusian fertilizer products—especially potash—were intended to exert political pressure. Instead, they removed a substantial share of global supply almost overnight.

While exemptions exist for food security reasons, logistical hurdles, payment restrictions, and reputational risk have made sourcing from these regions increasingly complex. European producers have struggled to fully replace these volumes, especially given persistently high energy costs that make nitrogen production less competitive.

As one industry expert, Kaan Ceylan, succinctly put it, “Fertilizer is the unseen casualty of today’s trade wars: China keeps product at home, Europe shuts out Russian and Belarusian supplies, key inputs like sulfur and gas stay expensive, and farmers worldwide are stuck paying the bill until new plants in East Asia and the Middle East can finally add some breathing room after 2026.”

This statement captures the cumulative effect of policies that, while often justified individually, collectively place enormous strain on the global fertilizer system.

Energy markets amplify these pressures. Nitrogen fertilizer production is particularly sensitive to natural gas prices, and ongoing volatility has reshaped trade patterns. Regions with access to cheap gas—such as the Middle East and parts of North Africa—have gained a competitive advantage, exporting more ammonia and urea to markets once served by European producers. Conversely, plants in high-cost energy regions have reduced output, mothballed capacity, or delayed investments, further tightening supply.

Sulfur, a key input for phosphate fertilizers, has also become more expensive and less predictable. Trade disruptions in petroleum refining, coupled with export limitations in key producing countries, have made sulfur sourcing more difficult. This has ripple effects across phosphate fertilizer markets, raising production costs and limiting availability just as global food demand continues to grow.

In response to these constraints, fertilizer manufacturers are quietly rethinking their long-term strategies. Supply chain diversification has moved from a cost-saving exercise to a risk-management imperative. Companies are investing in alternative sourcing agreements, regional storage, and flexible production lines that can adjust formulations based on input availability. Digital supply chain tools and predictive analytics are increasingly used to anticipate disruptions before they fully materialize.

New Plants, New Hope

At the same time, new capacity is emerging—but not where it once did. Significant investments in nitrogen, phosphate, and ammonia plants are underway in East Asia and the Middle East, regions offering favorable energy economics and supportive industrial policies. These projects promise to rebalance global supply, but most will not come fully online until after 2026. Until then, markets remain tight, and price volatility is likely to persist.

For farmers, the effects are immediate and tangible. Higher fertilizer prices translate directly into higher production costs, forcing difficult decisions about application rates, crop selection, and planting acreage. In many regions, reduced fertilizer use risks lower yields, exacerbating food security concerns. Governments have responded with subsidies and price controls, but these measures often mask underlying structural problems rather than resolve them.

Looking Towards a Fertile Future

Trade restrictions are unlikely to disappear. Instead, they are becoming a permanent feature of the fertilizer landscape, reshaping global flows in subtle but lasting ways. Manufacturers that succeed will be those that adapt early by investing in regional resilience, optimizing production efficiency, and planning for a more fragmented global market. The fertilizer industry may operate largely out of public view, but its transformation under today’s trade policies will have consequences that reach every dinner table in the years to come.