Increasing food cost pressure could burden Asia's emerging markets as the lingering US-Iran war further strains fertilizer supply amid the upcoming planting season, Fitch Ratings said in a recent release.
Limited fertilizer availability and price pressure would increase production costs, dissuade application rates, and dampen crop yield, impacting margins and food prices for this year, Fitch said.
The Gulf region supplies a large portion of the world's fertilizer especially with natural gas' key role as feedstock, Fitch said.
The rating agency also expects major Asian exporters such as China to further limit fertilizer shipments, at least until mid-year.
Nitrogen-based urea prices posted a 50% rise to about $700 per tonne from about $465 pre-war, Fitch said.
A resulting reduction in fertilizer use or planting could worsen the risk of weaker crop yields and increased food prices in the latter part of the year, the rating agency said.
Given the reliance on domestic production by the region's emerging nations, less fertilizer supply will have a significant impact under constrained planting or yields, Fitch said.
For those that are more dependent on imported food, such as the Maldives, Mongolia, the Philippines, Bangladesh, and Sri Lanka, weaker domestic harvests along with heightened global food prices and export restrictions would create more adverse situations, Fitch said.
Continued conflict after mid-2026 and elevated oil prices could place an additional 9.1 million people in Asia into acute food insecurity, or a 24% increase from before the war, Fitch cited the World Food Programme as saying.