EU Suspends Fertilizer Tariffs to Ease Impact of Hormuz Crisis

The Council of the European Union announced Friday that the bloc will temporarily suspend tariffs on key nitrogen-based fertilizers, including urea and ammonia, for one year in an effort to reduce the indirect economic fallout from the Iran war and disruptions in the Strait of Hormuz.

Global fertilizer prices have surged in recent weeks following the near-total shutdown of the strategic waterway, through which roughly one-third of the world’s fertilizer trade typically passes.

The European Union said the temporary tariff suspension is intended to ease supply pressures and contain rising costs for the agricultural sector as countries worldwide scramble to secure alternative fertilizer supplies.

Although the EU is not heavily dependent on Middle Eastern nitrogen fertilizer exports such as urea, prices for nearly all major fertilizer products have risen sharply amid tightening global supply chains and growing concerns over food security.

Last month, the Food and Agriculture Organization warned that a prolonged disruption to fertilizer trade routes could trigger severe consequences for global agriculture and food production.

In its statement, the EU council clarified that the tariff suspension will not apply to fertilizer imports originating from Russia or Belarus.

The European Union already imports large quantities of fertilizers duty-free from countries benefiting from preferential trade arrangements. However, officials said “significant volumes” of imports remain subject to tariffs ranging between 5.5% and 6.5%.

The new measures are expected to take effect within days following publication in the EU’s official journal.

According to EU data, the bloc imported around 2 million tonnes of ammonia and 5.9 million tonnes of urea in 2024, in addition to approximately 6.7 million tonnes of nitrogen fertilizers and nitrogen-containing blends.

The Middle East accounts for only a small share of those imports. The European Commission estimates that the EU’s direct dependence on the region stands at roughly 3% for ammonia and between 1% and 2% for nitrogen fertilizers.

Earlier this month, the International Monetary Fund warned that increases in fertilizer prices typically take around six months to feed into global food prices and may eventually reduce crop yields and worsen food-security risks in vulnerable countries.

IMF spokesperson Julie Kozack said historical trends show that rising fertilizer costs gradually translate into higher food prices, potentially intensifying agricultural production challenges and food-security pressures worldwide.