Fitch Ratings has warned that emerging markets in Asia could face rising cost pressures across agribusiness sectors and food supply chains if a prolonged US-Iran conflict continues to disrupt fertiliser supplies further into the planting season.

The agency said that reduced availability and higher fertiliser prices would lift production costs, discourage application rates and weaken crop yields, in the process feeding through to margin pressure and ultimately higher food prices later in 2026.

Food inflation risks would thus increase if fertiliser supply and pricing fail to normalise in the near term, particularly as parts of South and Southeast Asia are now entering sowing seasons. This is because much of the global fertiliser production sector is concentrated in the Gulf, where natural gas is a key input. Continued conflict in Iran would keep gas prices elevated and at the same time disrupt regional shipping, while key exporters such as China are expected to maintain restrictions on fertiliser shipments at least through mid-year.

Nitrogen-based urea prices have already risen by around 50% to about $700 per tonne from in the region of $465 before the conflict. If elevated prices persist, farmers may cut application rates or reduce planting, thereby increasing the risk of weaker harvests and higher food prices later in the year Fitch says.

Domestic production remains the primary source of food across much of emerging Asia, meaning that fertiliser shortages could have a material impact if planting and yields are affected. Import dependence leaves some economies more exposed if weaker domestic output coincides with high global prices and export restrictions in traditional suppliers.

Food import dependence stands in the mid-teens for Philippines, Bangladesh and Sri Lanka, rising to the mid-20% range in Mongolia. In the Maldives meanwhile, it reaches 78.3%, though this largely reflects demand from the tourism sector.

Near-term food price pressures also remain moderate in most economies due to the lagged pass-through from energy costs Fitch continues with the World Food Programme estimating that if the Iran conflict continues beyond mid-2026 and oil prices remain above $100 per barrel, an additional 9.1mn people in Asia could fall into acute food insecurity. This would be a 24% increase from pre-war levels.

Some countries, including India, have sufficient fertiliser stockpiles to meet upcoming planting needs which in turn limits near-term cost pressures. In most other emerging Asian markets with weaker buffers, higher input costs are expected to pass through more directly into farmgate and consumer food prices, however.

Risks to crops would also intensify if disruption persists through the planting cycle, reducing fertiliser application rates. The impact of this would vary depending on crop mix, dietary staples and fertiliser intensity. Citing a long-running wheat experiment in the UK, Yara International estimates that yields can fall by as much as 43% in a year without nitrogen fertiliser, with losses exceeding 80% over a longer period. Fitch stressed this is not its base case but illustrates the potential impact of sustained disruption on planting decisions, input use and harvests.