Pakistan's Agricultural Resilience Post-Hormuz Crisis

Discover how the 2026 Strait of Hormuz crisis exposed Pakistan's agricultural resilience challenges and why energy security, fertilizer reforms, resilient supply chains, and strategic policy investments matter for sustainable food security.

POLICY BRIEFS

Sooyam Kumar

7/7/2026

The two-month closure of the Strait of Hormuz in early 2026 exposed one of the greatest structural vulnerabilities in Pakistan's economy and highlighted how closely the country's food security is tied to global energy supply chains. This narrow 33-kilometer-wide maritime corridor, through which nearly one-fifth of the world's oil and almost one-quarter of globally traded seaborne crude passes, serves as the primary gateway for energy supplies entering Pakistan. When escalating tensions between the United States and Iran effectively disrupted shipping through the Strait on February 28, 2026, the consequences extended far beyond international geopolitics. They quickly evolved into a national economic and agricultural emergency, demonstrating that Pakistan's food production system is highly vulnerable to external energy shocks.

Pakistan depends on the Gulf region for nearly 90 percent of its crude oil and Liquefied Natural Gas (LNG) imports. Approximately 99 percent of the country's LNG originates from Qatar and the United Arab Emirates, while nearly 70–80 percent of imported crude oil reaches Karachi through shipping routes that pass directly through the Strait of Hormuz. When these supply chains were disrupted, domestic fuel markets reacted immediately. Petrol prices rose from PKR 266.17 to PKR 321.17 per liter within weeks, while diesel prices increased by an extraordinary 87 percent. The surge in energy costs rapidly spread across the economy, increasing transportation expenses, electricity generation costs, industrial production costs, and inflationary pressures.

For Pakistan's agricultural sector, the crisis was particularly severe. Modern farming relies heavily on diesel-powered tractors, tube wells, harvesters, threshers, and transport vehicles that move agricultural inputs and produce between farms and markets. As fuel prices soared, irrigation became more expensive, land preparation costs increased, and transporting fertilizers, seeds, livestock feed, fruits, vegetables, and grains became significantly costlier. The Strait of Hormuz crisis therefore demonstrated that safeguarding Pakistan's agricultural future requires not only improving farm productivity but also strengthening national energy security, diversifying fuel sources, and reducing dependence on a single maritime trade route that remains vulnerable to geopolitical instability.

The Domino Effect: How Energy Disruptions Ripple Through Pakistan's Agricultural Economy

The closure of the Strait of Hormuz demonstrated that energy disruptions affect far more than fuel prices, they create a cascading crisis that spreads throughout the entire agricultural economy. Modern agriculture depends heavily on reliable and affordable energy, making fuel shortages and price spikes a direct threat to food production, processing, and distribution. As diesel and petrol prices surged, the cost of operating tractors, harvesters, threshers, tube wells, and other farm machinery increased dramatically. Many farmers postponed land preparation, irrigation, and harvesting operations because fuel had become either prohibitively expensive or difficult to obtain. Transport costs also rose sharply, forcing farmers, traders, and wholesalers to delay moving agricultural produce to markets in anticipation of lower fuel prices. These delays increased post-harvest losses, reduced product quality, and caused shortages of fresh fruits, vegetables, milk, and other perishable commodities in urban markets. Simultaneously, prolonged electricity shortages and widespread load-shedding disrupted routine farming activities, slowing irrigation schedules and reducing the efficiency of agricultural operations during critical planting and harvesting periods.

The crisis extended well beyond farms into industries that support Pakistan's agricultural value chain. The disruption of Liquefied Natural Gas (LNG) imports from Qatar forced Pakistan to procure emergency spot cargoes at prices exceeding US$17 per million British thermal units (mmBtu), almost double the rates secured under long-term supply agreements. Higher LNG costs significantly increased electricity generation expenses and constrained energy supplies for fertilizer factories, food processing industries, textile mills, cold storage facilities, and agro-based manufacturing units. Rising production costs reduced industrial output, delayed investment, and weakened export competitiveness. Cold-chain disruptions further increased spoilage of perishable agricultural products, while higher transportation and manufacturing costs translated into more expensive farm inputs and consumer food prices. The Strait of Hormuz crisis illustrated that Pakistan's agricultural resilience depends not only on productive farms but also on secure energy supplies, reliable industrial infrastructure, and diversified fuel sources capable of protecting the entire food system from external geopolitical shocks.

The Fertilizer Shock and the Fragility of Pakistan's Agricultural Supply Chains

Among the many economic consequences of the Strait of Hormuz crisis, none posed a greater long-term threat to Pakistan's food security than the disruption of fertilizer supplies. The crisis exposed a critical structural weakness in the country's agricultural system. Although Pakistan is largely self-sufficient in urea production, it remains heavily dependent on imported phosphatic fertilizers, particularly Di-Ammonium Phosphate (DAP), which is indispensable for balanced crop nutrition. More than 60 percent of Pakistan's DAP requirements are imported, with much of the supply originating from Gulf countries whose exports pass through the Strait of Hormuz. When maritime trade was disrupted, fertilizer supply chains were immediately affected, triggering shortages and unprecedented price increases. Globally, nearly 30 percent of traded urea, 27 percent of ammonia, 24 percent of phosphates, and almost half of Sulphur exports normally transit this strategic waterway. During the crisis, Sulphur exports collapsed to nearly one-tenth of their normal volumes, while Pakistan recorded virtually no DAP imports during April and May 2026. By the end of September, national DAP inventories were projected to fall to only 61,000 tonnes compared with the five-year average of approximately 335,000 tonnes, just weeks before the critical Rabi planting season. International Sulphur prices surged to around US$710 per tonne, while DAP prices reached US$925-950 per tonne. Domestically, fertilizer prices increased sharply from approximately PKR 12,000 to over PKR 16,000 per 50-kilogram bag, placing balanced fertilization beyond the reach of many smallholder farmers.

The implications for agricultural productivity were profound. Phosphorus supplied through DAP is essential for root development, early plant establishment, grain formation, and overall crop vigor in wheat, rice, cotton, maize, and other major crops. Unlike nitrogen supplied through urea, phosphorus cannot easily be substituted without compromising crop performance. Faced with escalating prices, many farmers reduced DAP applications or replaced it with excessive amounts of urea, creating nutrient imbalances that weaken soil fertility, reduce crop quality, and diminish long-term productivity. During the Rabi season, DAP sales reportedly declined by more than 20 percent, raising concerns about lower yields and declining farm profitability. Analysts estimated that fertilizer price increases of 30-50 percent could reduce fertilizer consumption by 6-20 percent and lower yields of major crops by 2-10 percent, threatening national food security. Simultaneously, agricultural supply chains came under immense pressure as freight charges, marine insurance premiums, and container shipping costs increased several-fold, substantially raising the cost of importing agricultural inputs and exporting farm products. These disruptions highlighted that Pakistan's agricultural resilience depends not only on domestic production but also on secure international logistics, diversified fertilizer supply sources, strategic reserve stocks, and policies that strengthen the country's capacity to withstand future geopolitical and energy-related shocks.

Building a More Resilient Agricultural Future

The Strait of Hormuz crisis has highlighted the urgent need for Pakistan to strengthen the resilience of its energy, fertilizer, and agricultural supply chains against future geopolitical disruptions. One of the most important priorities is diversifying import sources. Recognizing the risks of excessive dependence on Gulf suppliers, Pakistan received its first Liquefied Natural Gas (LNG) cargo from the United States in May 2026, while also exploring long-term energy partnerships with Russia, Nigeria, Venezuela, and other suppliers. Similar diversification is needed for agricultural inputs, particularly phosphatic fertilizers. Countries such as India have successfully expanded fertilizer imports from multiple suppliers, including Oman, Malaysia, Russia, Egypt, Algeria, Türkiye, and the Netherlands, thereby reducing reliance on a single trade corridor. Pakistan must pursue a comparable strategy to enhance supply security and reduce vulnerability to future maritime disruptions.

Equally important is the establishment of strategic petroleum and fertilizer reserves capable of cushioning temporary supply interruptions and stabilizing domestic markets during international crises. Expanding domestic fertilizer manufacturing should become another national priority. While Pakistan has achieved near self-sufficiency in urea production through natural gas-based fertilizer plants, domestic DAP production remains insufficient to meet national demand. Increasing investments in phosphate fertilizer manufacturing, utilizing indigenous resources through initiatives such as Thar coal gasification, and encouraging public-private partnerships could significantly reduce import dependence over the long term.

The crisis also reinforces the importance of accelerating the transition toward renewable energy. Expanding solar-powered irrigation systems, solar tube wells, and decentralized renewable energy technologies can reduce agriculture's dependence on imported diesel and LNG while lowering production costs and greenhouse gas emissions. Strengthening transport infrastructure, diversifying shipping routes, modernizing ports, improving storage facilities, and enhancing regional trade cooperation will further improve supply-chain resilience. Together, these measures can transform a painful geopolitical lesson into an opportunity to build a more self-reliant, energy-secure, climate-resilient, and globally competitive agricultural sector capable of withstanding future external shocks while safeguarding Pakistan's food security and economic stability.

Conclusion

The Strait of Hormuz crisis of 2026 demonstrated that Pakistan's agricultural resilience depends on far more than fertile land and hardworking farmers. It revealed how deeply food production is intertwined with global energy markets, fertilizer supply chains, and international trade routes. Rising fuel prices, fertilizer shortages, disrupted logistics, and escalating production costs exposed structural vulnerabilities that threaten both food security and economic stability. While the crisis created significant hardships, it also provided an opportunity to rethink national priorities. Diversifying energy and fertilizer import sources, expanding domestic fertilizer production, establishing strategic petroleum and fertilizer reserves, investing in renewable energy, and strengthening transport and storage infrastructure are essential steps toward reducing future risks. Equally important is promoting energy-efficient farming technologies and resilient agricultural supply chains. By transforming these lessons into long-term policy reforms and strategic investments, Pakistan can build a more self-reliant, competitive, climate-resilient, and food-secure agricultural sector capable of withstanding future geopolitical and economic shocks.

Please note that the views expressed in this article are of the author and do not necessarily reflect the views or policies of any organization.

The writer is affiliated with the Department of Agricultural Economics, Faculty of Social Science, Sindh Agriculture University Tandojam, Pakistan and can be reached at princesoyamk@gmail.com

Pakistan's Agricultural Resilience Post-Hormuz Crisis

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