Pakistan’s wheat growers are cutting back on diammonium phosphate after the Middle East war drove up fertilizer prices, a shift that threatens yields and could deepen the country’s reliance on imported grain.
Pakistan Wheat Farmers Cut DAP Purchases
Economic Growth Targets
The squeeze matters because wheat is a staple crop in Pakistan and fertilizer is one of the biggest variable costs in planting. When a key input becomes unaffordable, farmers do not just trim margins — they often plant less land or apply less fertilizer, both of which can reduce output and tighten domestic supplies. In a country already forced to import wheat after shortages lifted flour prices, that makes an external shock in the Gulf an immediate food-security issue at home.
Sentiment Indicators
Diammonium phosphate, or DAP, has risen 23% since the conflict disrupted trade through the Strait of Hormuz and lifted raw material and shipping costs. Fauji Fertilizer Company, Pakistan’s only DAP producer, lists a 50-kilogram bag at Rs17,183, up from Rs14,009 when the war began, while farmers in the field say retail rates are closer to Rs18,000. That compares with about Rs10,500 for nitrophosphate, a cheaper alternative now being substituted by growers such as Muneer Ahmed in southern Sindh.
The trade-off is yield. Farmers say DAP is used to strengthen roots and improve crop development at planting, and many believe cutting back sharply can reduce output by 30 to 35 maunds per acre. One grower interviewed in Mirpurkhas said the cheaper substitute could deliver about 25 maunds per acre versus 45 to 50 with DAP, underscoring why the fertilizer decision is now central to planting plans rather than a simple cost-saving measure.
The pressure is already visible in national demand. DAP sales fell 3% to 775,000 tons in January-September 2026 from a year earlier, according to Insight Securities, which cited official fertilizer data. Pakistan consumes about 1.5 million tons a year and imports nearly half of it, leaving domestic pricing highly exposed to international markets. That import parity dynamic means any further disruption to Gulf supply or freight rates flows directly into local farm economics.
The timing is particularly awkward for policymakers. The Federal Committee on Agriculture had targeted wheat output of 29.7 million tons for the 2025-26 season, but estimates in May pointed to 27.5 million tons after planted area and yields disappointed. The government later approved imports of 1 million tons of wheat after shortages and rising flour prices hit parts of the country. Another crop setback would intensify pressure on foreign-exchange reserves and leave the state more exposed to global wheat prices at a time when fiscal room is already limited.
There is some relief in the form of a Sindh subsidy of Rs4,000 per acre for small farmers, but that may not offset higher fuel, transport and fertilizer bills for larger growers. For fertiliser makers such as CF Industries, Mosaic and Nutrien, the broader story is that geopolitical supply disruptions can support prices and margins in export markets, even as they strain affordability in importing countries. For Pakistan’s farmers, the effect is the opposite: a cost shock that may already be changing what gets planted, and how much.
What happens next will depend on whether the war-driven shipping disruption eases before the winter sowing season is fully locked in. If it does not, fertilizer cutbacks could become a yield story first and an import bill story soon after, with the biggest losers likely to be small farmers and consumers — and the biggest gainers the foreign suppliers able to sell into a tighter global DAP market.
| Entity | Gains | Losses |
|---|---|---|
| Fertilizer exporters | ▲Higher selling prices | ▼Demand risk in importers |
| Pakistan wheat farmers | ▲Lower input spending | ▼Lower yields |
| Pakistan consumers | ▲None | ▼Higher flour prices |
| Import-reliant wheat buyers | ▲None | ▼Bigger import bill |
