🏭 As geopolitical tensions restrict navigation through the Strait of Hormuz, renewed global supply chain disruptions are threatening food security via the fertilizer sector. While major global powers find themselves in limbo either by energy shortages or a lack of arable land, Egypt — as a natural gas producer and a key player in the global fertilizer market, but also a nation striving for balance in food security — stands at a crossroads.

The crisis is playing out differently across the globe. According to a recent report by the Food and Agriculture Organization (FAO), India — despite being a major food producer — imports over 50% of its natural gas, leaving its food security directly threatened by energy costs and availability. Meanwhile, Gulf nations lead in energy and fertilizer production but face logistical hurdles due to their heavy reliance on food imports. Western Europe maintains high farming yields, but imports the bulk of its energy and fertilizer needs, placing it under severe inflationary pressure.

Egypt’s position in the global fertilizer market

Egypt possesses a robust industrial infrastructure that positions it as a global leader in the fertilizer sector. The country accounts for over 4% of global fertilizer production, totaling approximately 12 mn tons. Egypt currently ranks seventh globally in urea production, with nitrogen-based fertilizers representing about 8 mtpa, Chemical and Fertilizers Export Council Chairman Khaled Abu Al Makarem told EnterpriseAM. 40-50% of this volume is earmarked for export markets.

We also maintain a production volume of nearly 4 mn tons of phosphate fertilizers annually, which makes fertilizers as a whole our second-largest export sector, with a value reaching approximately USD 2.8 bn in 2025, Abu Al Makarem tells us.

Fertilizers vary by industrial inputs and agricultural seasons. Nitrogenous fertilizers (such as urea and ammonia) are essential for winter and spring crops and rely heavily on natural gas as both an energy source and a primary feedstock. In Egypt, gas accounts for roughly 70% of their production costs, making them highly vulnerable to the current shipping and energy crises. Conversely, phosphate and potassium fertilizers are better suited for summer crops and do not face the same risks, as their production is not tied to natural gas.

These raw materials are either available locally or safely imported from neighboring countries like Jordan, shielding them from distant maritime shocks, according to Chairman of the Chamber of Chemical Industries at the Federation of Egyptian Industries Sherif El Gabaly.

The dual crisis of energy and logistics presents a new reality. Local industry is tested by its ability to seize lucrative export windows created by global supply gaps. However, these ambitions are hindered by complex domestic challenges regarding the sustainability and pricing of gas supplies to factories, a local fertilizer company official told EnterpriseAM.

This puts decision-makers in quite the situation: maximizing USD revenues through exports while also securing the domestic market to protect the agricultural sector from inflationary waves that could jeopardize food security.

The state of play

Vessel transit has plummeted by 97% on the Strait of Hormuz due to recent regional conflict, according to an UNCTAD report, which noted that a third of the world’s seaborne fertilizer trade passes through the strait. With navigation restricted in the Strait of Hormuz, war risk ins. has jumped to 1% from 0.02%, and the cost of insuring a single vessel per trip has skyrocketed to USD 1.2 mn from USD 40k. Rerouting and high fuel costs have also extended transit times by several weeks, according to the Arab Fertilizer Association.

The blockade has trapped approximately 4 mn tons of gas-dependent products — like ammonia and urea — forcing major producers in Saudi Arabia, Qatar, and the UAE to declare force majeure, according to a Wood Mackenzie report.

Egyptian fertilizer export prices have surged in tandem with the global market. Urea export prices from the Middle East have climbed 105% y-o-y, reaching USD 835 per ton this month, compared to USD 484 prior to the escalation. Ammonia export prices rose 35.4% y-o-y to USD 670 per ton.

While there is strong international demand to fill the vacuum left by Gulf suppliers, Egypt’s ability to capitalize on this is contingent on steady gas supplies to local plants. North African producers could bridge the gap — the International Trade Centre notes that Egypt has USD 1.6 bn in untapped export potential.

How Egypt is circumnavigating the crisis

The government is moving toward a flexible pricing mechanism, linking the cost of gas supplied to factories to international export prices. This follows a September 2025 move where the government raised industrial gas prices to USD 5.5 per mmBtu from USD 4.5. However, with urea exceeding USD 800 per ton, the effective cost of gas for some producers has crossed USD 9 per mmBtu. CI Capital suggests the government may raise the price floor to narrow the gap between the composite cost and the minimum price.

In 2025, Egypt was a marginal net food exporter, with agricultural exports hitting USD 11.5 bn against imports of USD 10.37 bn — 83% of which were wheat, corn, and soybeans. Domestically, rising input costs are straining the state budget. Agriculture Minister Alaa Farouk stated that fertilizer subsidies for farmers exceed EGP 40 bn annually. Despite these pressures, El Gabaly notes that Egypt remains far from a fertilizer shortage due to sufficient local production and government mandates prioritizing domestic consumption.

With the FAO warning that a prolonged global shortage of inputs could slash productivity and trigger a spike in food prices, Egypt faces a tough test balancing between being a natural gas producer and fertilizer exporter. The fix? Resource management and carefully weighing between directing gas to power stations or industrial plants, exporting to generate hard currency, and securing the domestic market at subsidized prices.

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