The disruptions in the Strait of Hormuz are sending shockwaves “thousands of kilometers” toward the “world’s most vulnerable economies,” including Ethiopia, according to a new analysis by Mercy Corps. The report, which identified fertilizer supply chains as being among the most severely affected sectors, warned that the fertilizer spike risks undermining Ethiopia’s 2026 harvest.
The Crisis Analysis report, titled “The Long Reach of War: The Middle East Conflict’s Economic Impact on Fragile Contexts,” examines five nations it categorizes as the “world’s most vulnerable economies.” These five countries are Somalia, Sudan, Pakistan, Ethiopia, and Myanmar.
The analysis finds that shocks transmitted through fertilizer supply chains, energy markets, and shipping routes have begun to impact Ethiopia at a critical moment in its agricultural calendar. This disruption threatens to spill over into production levels and food prices in the months ahead. Noting serious concerns for Ethiopia’s agricultural outlook, the report emphasized that the impact may already be “locked in” for upcoming harvests.
RELATED POSTS
The report noted that shocks transmitted through fertilizer, fuel, and shipping channels are already destabilizing food systems far beyond the immediate war zone.
For Ethiopia, the most immediate vulnerability lies in fertilizer imports. Global urea prices, a key benchmark for nitrogen fertilizer, have surged by about 68 percent within six weeks of the conflict, driven by disruptions in energy supplies and trade flows through the Strait of Hormuz, a critical global shipping corridor.
The report notes that natural gas, which accounts for up to 80 percent of urea production costs, experienced sharp price increases during the escalation. At the same time, nearly 30 percent of global nitrogen fertilizer exports, largely from Gulf producers, were effectively removed from the market as shipping through the strait collapsed by around 94 percent at the height of the crisis.
Ethiopia imports more than 90 percent of its fertilizer from Gulf markets and relies on Djibouti as its primary import corridor, through which over 95 percent of its goods transit. This heavy concentration leaves limited resilience to external supply shocks, especially during peak agricultural periods.
The timing of the crisis is especially critical as it coincides with the ongoing belg planting season. Farmers are currently making input decisions amid rising prices and uncertain availability, increasing the risk of reduced fertilizer use or smaller cultivated areas. The report warns that such behavioral adjustments can have lasting effects on yields.
Citing threshold analysis, the report notes that disruptions lasting beyond 40 days tend to alter farmer behavior in ways that directly affect harvest outcomes. That threshold was crossed on April 9, even after the ceasefire announcement. As a result, the report argues that the impact on food production is already largely “locked in,” with effects expected to appear in Ethiopia’s belg harvest from the third quarter of 2026 and extend into the main meher season.
Meanwhile, Ethiopian officials reported weeks ago that approximately 1.5 million metric tons of fertilizer have already been stocked, out of a total 2.1 million metric ton demand for the year. However, data inconsistencies remain across sources.
Beyond Ethiopia, the fertilizer shock is contributing to broader global food inflation pressures. The Food and Agriculture Organization’s food price index reached 128.5 points in March 2026, its highest level since September 2025, reflecting rising input costs linked to ongoing supply disruptions.
