UKOilWatch Special Report — what the global energy shock means for Britain.
The global fertiliser crisis has not developed as many feared when traffic through the Strait of Hormuz collapsed earlier this year.
The worst physical shortage has not materialised.
Global fertiliser trade adapted.
International Trade Centre data reported by the Financial Times on 15 September show urea imports from Gulf exporters falling by approximately 85%, while total global fertiliser imports declined by only around 6%. Egypt and Nigeria expanded exports sharply, while Russia, China and the United States gained share in important replacement markets.
That is the good news.
The less comfortable conclusion is that the world replaced the lost tonnes much more successfully than it replaced their price.
Urea was still around 70% more expensive year-on-year during the second quarter.
For Britain, that distinction matters particularly because the UK fertiliser system already contains a dependency that is easy to overlook.
Britain still manufactures ammonium nitrate.
But Britain no longer manufactures the ammonia at the heart of that production.
Britain already imports the feedstock for its domestic nitrogen fertiliser
The structural change occurred before the current Middle Eastern crisis.
CF Industries permanently stopped ammonia production at Billingham after concluding that high UK natural-gas and carbon costs made domestic ammonia production uncompetitive against imports. The Ince fertiliser complex had already closed.
Billingham continues producing ammonium nitrate and nitric acid, but does so using imported ammonia. CF's annual report confirms that since ceasing ammonia production in 2023 it has imported ammonia for upgrading into nitrogen products at the Billingham facility.
That distinction is important.
A bag of British-produced ammonium nitrate remains a British-manufactured product.
But one of its most important industrial inputs now arrives through an international supply chain.
The UK's nitrogen system therefore has two layers of exposure:
finished fertiliser imports, and
imported ammonia feeding domestic fertiliser production.
This does not mean Britain faces an imminent supply shortage.
In a written parliamentary answer on 27 May 2026, UIN 2259, Defra said UK fertiliser supply was sufficient for the season. It noted that, alongside domestic production, Britain imports fertiliser from a wide range of countries, allowing the supply chain to remain dynamic while maintaining a diversity of nutrient supply.
But the structure means international ammonia prices, freight, shipping access and exchange rates matter even to fertiliser labelled as domestically produced.
The market has adapted — at a cost
AHDB's latest weekly GB fertiliser survey, for the week ending 11 September, illustrates how the shock has translated into farm prices.
UK-produced ammonium nitrate: £473/t Imported ammonium nitrate: £472/t Granular urea: £471/t DAP: £789/t TSP: £626/t Nitrate sulphur: £480/t
Compared with the February pre-conflict baseline, UK-produced ammonium nitrate was 17.5% higher, imported AN 16.9% higher, DAP 9.7% higher, TSP 19.1% higher and nitrate sulphur 20.0% higher.
This is not the price behaviour of a market in physical collapse.
It is the price behaviour of a market that has managed to find alternative supply while forcing the cost of disruption down the chain.
AHDB's 14 September market assessment said merchants and buying groups remained able to fulfil the majority of orders.
But there were already pinch points. Respondents reported being able to fulfil only around 75% of nitrate-sulphur orders within 28 days, with lead times for some orders extending to six weeks.
That is a useful distinction for the months ahead.
Britain does not currently have a national fertiliser shortage.
It does have a market in which particular products, delivery windows and prices are becoming less comfortable.
Britain's vulnerability begins with gas — even when the gas is consumed abroad
Ammonia production is fundamentally a natural-gas business.
For many nitrogen producers, gas represents more than 70% of the variable cost of ammonia production.
The UK discovered the implications earlier than much of Europe.
When CF announced the permanent closure of Billingham's ammonia plant in 2023, it said projected British natural-gas prices and carbon costs meant producing ammonia there would remain less competitive than importing it.
That decision removed one layer of direct UK gas exposure.
But it did not remove energy from the fertiliser system.
Instead, the gas is consumed wherever the imported ammonia is manufactured.
Britain then pays for that energy indirectly through the ammonia price, freight and currency.
This is why a disruption to Gulf gas, European gas or international ammonia trade can affect British agriculture even if there is sufficient gas in Britain's own network.
Energy risk has been displaced geographically rather than eliminated.
Britain's import diversification helped
There is one important source of resilience.
AHDB's February outlook noted that Britain had reduced its reliance on EU fertiliser imports in recent years, partly because expensive European gas made supplies from other regions more competitive. Britain increasingly sourced from the Middle East and the Americas as well as Europe.
Before the Hormuz disruption, that diversification looked economically rational.
After the disruption, it also demonstrates why diversification is not the same thing as immunity.
When a major exporting region loses supply, buyers do not simply lose those tonnes. They enter other supplier markets and compete for the same replacement tonnes as everybody else.
That is exactly what appears to have happened internationally.
Egypt and Nigeria expanded exports.
Other suppliers gained market share.
Total global fertiliser trade fell far less than Gulf-origin trade.
The market worked.
But it worked through price.
The UK has an unusual position compared with the EU
Britain is not following exactly the same policy path as the European Union.
The EU's Carbon Border Adjustment Mechanism already covers fertiliser imports.
The UK CBAM begins on 1 January 2027 and will include specified fertiliser products alongside aluminium, cement, hydrogen, iron and steel. Importers crossing the relevant £50,000 threshold will fall within the regime.
The logic is similar to Europe's.
UK producers face domestic carbon costs. CBAM is designed to prevent imported carbon-intensive products from receiving a structural advantage simply because their emissions occurred elsewhere.
That matters for Billingham.
CF warned years ago that UK carbon costs were making domestic fertiliser production less competitive against imports.
But this creates the same difficult trade-off faced in Europe.
A carbon border mechanism can protect domestic manufacturing from high-emission imports.
It can also increase the cost of some imported fertilisers.
For agriculture, the timing is important.
The UK system starts in 2027 — precisely when global fertiliser markets may still be adjusting to the largest disruption in years.
Russian ammonium nitrate is also constrained
Britain has separately chosen to maintain anti-dumping duties on Russian ammonium nitrate.
In January the government accepted the Trade Remedies Authority's recommendation to retain duties ranging from £24.085 to £27.374 per tonne until December 2030.
The TRA concluded that dumping and injury to the UK production industry were likely to recur if the measures were removed.
That makes industrial sense from the perspective of protecting Britain's remaining manufacturing capacity.
But it reinforces the broader point.
Britain wants a resilient domestic fertiliser industry while also depending heavily on international feedstocks and finished products.
It needs imports — but not imports that destroy the remaining domestic industrial base.
Balancing those objectives becomes considerably harder during a global price shock.
The 2027 problem is increasingly farm economics
There is another reason not to focus solely on physical availability.
AHDB says most fertilisers remain obtainable.
The more important question is whether they are economical to apply at normal rates.
Its 14 September assessment said major fertiliser products remained between 5% and 23% above pre-conflict February levels through much of the summer.
Farmers have consequently been cautious about committing too early to purchases.
AHDB has warned that this caution can itself contribute to later logistical pinch points because the fertiliser supply chain cannot move unlimited quantities onto farms at short notice.
This creates an awkward feedback loop.
High prices encourage farmers to wait.
Waiting concentrates orders closer to application.
Concentrated orders strain transport and merchant capacity.
That can produce local availability problems even when national supply is technically sufficient.
Defra's assessment that supply was sufficient for the 2026 season therefore remains entirely compatible with a much less comfortable purchasing environment for 2027.
Phosphate and potash are part of the UK problem too
Nitrogen attracts most attention because of natural gas.
But the latest British price data show pressure elsewhere.
DAP was £789/t in the week ending 11 September, 9.7% above its February pre-conflict level, while TSP was £626/t — 19.1% higher.
China's restrictions on DAP and MAP exports and exceptionally high sulphur costs have helped keep global phosphate markets tight.
This matters because a farmer can react to expensive fertiliser in more than one way.
Nitrogen may receive priority because its yield response is immediate and visible.
Phosphate or potash applications can sometimes be postponed where soil reserves allow.
That can protect this year's cash flow while creating a less visible agronomic problem later.
The global fertiliser crisis therefore does not need to produce a shortage of every nutrient simultaneously to affect future productivity.
Britain's advantage is logistics and purchasing power
The UK is in a fundamentally different position from landlocked countries in the Sahel.
It has deep-water ports, established importers, sophisticated commodity markets and the purchasing power to compete for internationally traded product.
That matters enormously.
The same global price shock can result in an expensive delivery to a British farm but no delivery at all to a farmer in a weaker or disrupted supply chain.
This is why global aggregate availability can be reassuring and misleading at the same time.
The tonnes exist.
But access depends on infrastructure, currency, credit and purchasing power.
Britain sits relatively high in that hierarchy.
That reduces shortage risk.
It does not reduce price risk.
Three paths for Britain through 2027
The benign case remains plausible.
Middle Eastern fertiliser and LNG exports recover, international gas prices decline, Chinese phosphate exports normalise and additional global nitrogen capacity enters the market.
Under that scenario, the extraordinary price spike of 2026 continues to unwind and UK farmgate fertiliser prices move lower.
The second scenario is less dramatic but more important.
Global supply remains adequate, but energy and fertiliser prices stay structurally high. British merchants continue obtaining product, yet farm margins remain under pressure and some growers reduce or delay applications.
That scenario would generate no national fertiliser-shortage headline.
It could still materially affect farm profitability and future production.
The severe scenario combines continued Middle Eastern disruption with a cold European winter, another surge in gas and ammonia costs, tight phosphate supply and concentrated British purchasing ahead of spring applications.
Under that combination, current manageable delivery delays could develop into much more serious product-specific bottlenecks.
There is currently insufficient evidence to say that outcome will occur.
But there is enough evidence to monitor it.
Britain's fertiliser problem has changed
The important lesson from the first six months of the Hormuz disruption is that global trade proved more adaptable than feared.
That is encouraging.
But Britain's experience also demonstrates why resilience cannot be measured solely by whether fertiliser is physically available.
The UK's last major nitrogen-fertiliser plant produces ammonium nitrate from imported ammonia.
Finished fertiliser also arrives from overseas.
The international market sets the price.
From January, UK CBAM adds another variable.
And farmers eventually have to decide whether the crop value justifies the fertiliser cost.
The UK therefore occupies a relatively secure but increasingly expensive position in the new fertiliser system.
There is little evidence today that Britain is about to run out of fertiliser.
The more credible risk is that global energy and fertiliser disruption progressively changes what British farmers can economically justify applying.
The world found replacement fertiliser.
For Britain, the next question is how much that replacement supply costs by the time it reaches the farm.