Oil disruptions through the Strait of Hormuz may appear to be primarily an energy market issue, but for South Asia they carry much broader economic and food security risks. The region’s agriculture is deeply connected to global energy flows, imported fertilizer, natural gas, shipping routes, and fuel costs. When oil supply becomes unstable, the pressure quickly moves beyond fuel prices and begins to affect the cost and availability of agricultural inputs. For South Asia, where hundreds of millions of people depend on stable food production and affordable staples, this creates a serious vulnerability.
Energy and Agriculture Are Closely Linked
Modern agriculture is energy-intensive at every stage, from irrigation and machinery to transport, processing, and storage. Natural gas is also a key input in the production of nitrogen fertilizers, especially urea. When gas supply tightens or becomes more expensive, fertilizer production slows and prices rise. This makes fertilizer one of the main channels through which an energy shock can become an agricultural shock, especially in countries that rely heavily on imported inputs and long-distance supply chains.
South Asia’s dependence on fertilizer is substantial. India uses around 60 million tonnes of fertilizer nutrients annually, while Pakistan uses about 10 million tonnes and Bangladesh around 6 million tonnes. Nepal is more vulnerable because it has very limited domestic fertilizer production and depends heavily on imports. In 2024, India imported more than half of its total fertilizer from the Gulf, showing how strongly the region’s food production is linked to energy and trade flows from the Persian Gulf.
Fertilizer Delays Can Reduce Yields Fast
The timing of fertilizer supply is critical because farming does not allow much flexibility. Crops require nutrients at specific stages of growth, and delayed application can reduce yields even if fertilizer becomes available later. Staple crops such as wheat and rice are especially sensitive to nutrient availability. Evidence shows that removing nitrogen can reduce wheat yields by more than half, while inadequate phosphorus can lower rice yields by around 30%.
In a region where rice and wheat remain central to food security, even moderate fertilizer shortages can have serious consequences. Lower fertilizer availability can reduce production, tighten domestic supply, and increase pressure on food prices. These effects are especially difficult for low-income households, which often spend a large share of income on food. In countries such as Nepal, even small increases in staple prices can weaken food access and create wider social and economic pressure.
The 2007–2008 Crisis Offers a Clear Warning
The 2007–2008 global food crisis shows how quickly an energy shock can move into food markets. During that period, rising oil prices sharply increased fertilizer costs, and global fertilizer prices nearly tripled. Food prices followed the same direction, with the FAO Food Price Index rising by about 57% between 2006 and mid-2008. Bangladesh experienced rice price increases of more than 60%, and in some cases prices rose by 70–80%.
India experienced more moderate cereal price increases of around 20–30%, partly because of stronger policy interventions such as export restrictions. However, the broader impact across Asia and Africa was severe. More than 100 million people were pushed into extreme poverty. The crisis demonstrated that energy, fertilizer, agriculture, logistics, and food prices are not separate systems. They are connected parts of the same economic chain.
Lower-Income Countries Face Higher Exposure
The impact of current disruptions will not be evenly distributed across South Asia. Larger economies may be able to use subsidies, reserves, and stronger purchasing power to protect farmers from immediate shocks. Smaller and lower-income countries have fewer buffers. They face higher import costs, weaker fiscal space, and more limited capacity to secure fertilizer during periods of global competition.
This creates a difficult policy environment. Governments must protect farmers from input shortages while also protecting consumers from food inflation. Imports may offset some shortages, but during global disruption they become more expensive and less reliable. If fertilizer shipments are delayed, farmers may lose the opportunity to apply nutrients at the right time. The result can be weaker harvests, higher food prices, and increased dependence on external supply at exactly the wrong moment.
What South Asia Should Prioritise
Fertilizer supply should be treated as a strategic food security issue, not only as an agricultural input problem. In the short term, governments need to strengthen strategic reserves, diversify import sources, improve procurement systems, and coordinate distribution so that fertilizer reaches farmers before critical planting and growth periods. Regional cooperation can also play a larger role through joint procurement, shared logistics planning, and coordinated buffer stock mechanisms.
Longer-term resilience will require structural change. South Asia needs to improve fertilizer use efficiency, invest in alternative nutrient sources, expand domestic production capacity where feasible, and upgrade storage and distribution infrastructure. Increasing urea production, reducing supply bottlenecks, and improving last-mile delivery would help limit exposure to external shocks. At the same time, governments and businesses need to connect energy security, agricultural strategy, and food price stability within one planning framework.
A Food Crisis Can Start as an Energy Crisis
For businesses, investors, and policymakers, the message is clear: South Asia’s food security depends on more than rainfall, land, and farming practices. It also depends on energy routes, natural gas prices, fertilizer markets, maritime logistics, and regional coordination. If current disruptions continue, the next major pressure point may not be fuel shortages alone, but weaker harvests and higher food prices.
The region has already seen how energy shocks can cascade into fertilizer shortages and food inflation. The current situation should therefore be treated as an early warning. A stronger and more coordinated response would help South Asia reduce the risk of a deeper food security crisis in the months ahead.