Malaysia Faces Food Price Hikes as Iran Conflict Disrupts Fertiliser Supply

KUALA LUMPUR, March 18, 2026 – Rising fertiliser costs, triggered by disruptions to global supply chains stemming from the Iran conflict, are poised to increase the prices of essential food items in Malaysia, including vegetables, rice, chicken, eggs, and flour-based products. Experts warn that sustained disruptions could exacerbate inflationary pressures due to lower crop yields, increased feed and fuel costs, and the country’s reliance on fertiliser imports.

Critical Chokepoint: Strait of Hormuz

The Strait of Hormuz, a vital maritime route for fertiliser exports from major Gulf producers, is central to the issue. Approximately one-third of Malaysia’s fertiliser imports transit through this strategic chokepoint, making the nation vulnerable to supply disruptions and price volatility [1]. Globally, the Strait handles a significant portion of fertiliser trade, including urea, sulphur, and ammonia.

Fertiliser Price Surge and Supply Concerns

Professor Fatimah Mohamed Arshad, a research fellow at the Laboratory of Agricultural and Food Policy Studies, Universiti Putra Malaysia (UPM), highlighted the increasing cost of fertiliser due to competition among importers and the seasonal nature of demand, particularly during planting seasons. Unlike oil, fertiliser lacks strategic reserves, intensifying the impact of supply disruptions [1]. Delays in shipments and escalating costs are expected to lead to fertiliser shortages.

Impact on Agricultural Output

Higher fertiliser costs and potential shortages could discourage farmers from using adequate amounts of fertiliser, resulting in reduced agricultural output. This is particularly concerning for key crops like rice and vegetables, which are staples in the Malaysian diet.

Regional Implications

The impact extends beyond Malaysia, affecting food systems across South and Southeast Asia. More than half of agricultural fertiliser use in the region is nitrogen-based, and prices for urea, a widely used nitrogen-based fertiliser, have already risen by over 40 percent in Southeast Asia since the start of the conflict [2]. The ongoing war in Iran has effectively shut down the Strait of Hormuz, with at least three cargo ships coming under direct attack and hundreds of tankers idling outside the waterway [3].

Malaysian Producers Halt New Orders

Malaysian fertiliser producers have already begun halting new orders in response to the escalating prices [4].

Looking Ahead

The duration of the Iran conflict and its impact on the Strait of Hormuz will be critical in determining the extent of food price increases in Malaysia and the wider region. Monitoring fertiliser supply chains and exploring alternative sourcing options will be crucial for mitigating the risks to food security.