The ongoing 2026 Middle East conflict is emerging as a major risk to agriculture and economic stability across Asia and the Pacific, with sharp increases in fertiliser, energy and input costs threatening farm productivity and food prices, according to an Asian Development Bank (ADB) brief.
The report highlights that disruptions in energy supply chains and key agricultural inputs- particularly fertilisers- are already rippling through global markets. The Middle East accounts for nearly half of global urea exports and around 30% of ammonia supply, both critical for crop production. Supply disruptions in the region have tightened availability and pushed fertiliser prices significantly higher.
A major trigger has been production cuts in Qatar, where QAFCO, one of the world’s largest fertiliser producers, suspended operations due to gas supply constraints. This has led to a surge in fertiliser prices, compounding cost pressures for farmers globally.
The impact extends beyond fertilisers to other agriculture-linked inputs such as sulfur and petrochemicals, which are essential for fertiliser manufacturing and agrochemical production. Around 45% of global sulfur exports come from Gulf producers, and Qatar accounts for roughly one-third of world helium supply, both of which are relevant for fertilizer production, metals processing, and semiconductor manufacturing.
Rising energy prices are further intensifying the crisis. Crude oil prices surged from around $70 per barrel in late February to nearly $120 at the peak of tensions, before stabilizing now above $100. Natural gas prices have also seen sharp increases, raising production and transportation costs across the agricultural value chain.
For agriculture, the combined effect of higher fertiliser and energy prices is particularly concerning. Fertilisers are energy-intensive to produce, especially nitrogen-based products like urea and ammonia, which rely heavily on natural gas. As energy costs rise, fertiliser production becomes more expensive.
The ADB warns that these input cost increases are likely to feed into food inflation. Higher fertiliser prices can reduce application rates, lowering crop yields, while increased transportation and processing costs add further pressure on food supply chains.
Asia and the Pacific region is particularly vulnerable due to its heavy dependence on imported energy and agricultural inputs. Many economies in the region rely on timely imports of fertilisers, chemicals, and other farm inputs, making them sensitive to global supply disruptions.
Shipping disruptions through the Strait of Hormuz, a key transit route for energy and commodities, have added to the uncertainty. Vessel traffic through the strait has dropped sharply, while freight and insurance costs surged, further increasing the cost of importing agricultural inputs.
The report also notes that supply chain disruptions could delay delivery of critical inputs such as fertilisers and agrochemicals, affecting planting cycles and agricultural output in importing countries. With many supply chains operating on just-in-time systems, even short-term disruptions can have outsized impacts.
Beyond agriculture, the broader macroeconomic impact is also significant. The ADB estimates that a prolonged conflict could reduce economic growth in developing Asia by up to 1.3 percentage points and increase inflation by as much as 3.2 percentage points.
Food inflation is expected to be a key channel of this impact. Rising fertiliser and energy costs are projected to push up global food prices, with the effect becoming more severe under prolonged conflict scenarios.
The report underscores that economies dependent on imported inputs, including fertilisers, will face the greatest pressure. Farmers in these regions may experience reduced margins and increased financial stress, while governments could face rising subsidy burdens to protect food security.
To mitigate risks, the ADB recommends targeted policy support rather than broad subsidies, along with measures to improve energy efficiency and diversify supply sources. Strengthening supply chain resilience and ensuring timely access to agricultural inputs will be critical to maintaining food production.
The conflict highlights the growing vulnerability of global agriculture to geopolitical shocks. As disruptions continue, ensuring stable fertiliser supply and managing input costs will remain central to safeguarding food security in Asia and beyond.