Amid rows of wooden carts in one of Giza’s bustling markets, Mona stands hesitantly examining prices, recalculating over and over in an attempt to afford her household needs of vegetables, fruits, and meat, along with basic cleaning supplies. Mona says that “1,000 pounds ($20.83) are no longer enough to buy vegetables, fruits, and a few essential food items for more than a week or ten days at most.” She explains that prices keep rising constantly, and despite limiting her purchases to the bare necessities, she still finds herself unable to cover the needs of her family of five.
The forty-year-old housewife points out that the prices of essential goods have increased at least fivefold over the past three years — whether for vegetables, fruits, or meat — and even alternatives such as legumes have seen significant jumps. She confirms in her interview with Zawia3 that the continuation of this situation is placing low- and middle-income families under growing financial burdens and an increasingly severe difficulty in sustaining daily life.
Mona does not know the reasons behind the crisis, nor does she care to. All she hopes for is that solutions be found. Experts, however, attribute the crisis to several fundamental causes, foremost among them the sharp increase in fertilizer prices, which in turn affects agricultural crops, as well as the quality and availability of production — and ultimately, the prices and quality of food commodities.
Fertilizer prices in Egypt have witnessed dramatic surges in recent years, upending farmers’ calculations and deeply affecting the agricultural production cycle. Fertilizers, being the backbone of farming, are no longer available at the prices that Egyptian farmers had known for decades. Instead, they have become a burden consuming the largest share of production costs. With every new price hike, the farmer’s ability to meet his land’s fertilizer needs diminishes, which affects both the quantity and quality of yields. The end result is reflected in the food market, where commodity prices are reaching unprecedented highs.
According to the Alternative Policy Solutions Center, the prices of chemical fertilizers rose by as much as 564% between the 2015/2016 and 2021/2022 seasons — a leap that coincided with inflation in energy, fertilizer, and fuel inputs. During 2025, the price of one ton of fertilizer in the free market approached 18,000 pounds ($375), while a ton of ammonium nitrate reached about 24,000 pounds ($500), and a ton of urea hit roughly 25,000 pounds ($520.83).
Even in agricultural cooperatives — where prices are supposed to be subsidized and therefore lower — the gaps remain vast. A ton of nitrate fertilizer is sold for 7,800 pounds ($162.50), liquid ammonium sulfate for 3,500 pounds ($72.92), and potassium sulfate reaches 21,000 pounds ($437.50) per ton. Meanwhile, a single sack of fertilizer has climbed to around 1,300 pounds ($27.08) in some areas. Similarly, the price of free-market urea rose from around 1,100–1,200 pounds ($22.92–$25) to 1,600–1,700 pounds ($33.33–$35.42) within just three months.
The surge in fertilizer prices directly affects agricultural production costs, as fertilizers account for around 32% of the total cost of agricultural inputs, according to estimates from the Ministry of Agriculture. As a result, some farmers have begun reducing the quantities of fertilizer they use on their lands, which negatively impacts crop quality and yield. Others have been forced to scale down or even temporarily halt cultivation — a situation that signals a genuine threat to local food security.
An agricultural expert who spoke to Zawia3 on condition of anonymity — for fear of repercussions given his employment in a government agency — explained that the real crisis facing Egypt’s agricultural sector today lies in the fact that farming cannot continue without fertilizers, yet most agricultural inputs are now tied to the price of the US dollar.
He noted that more than 80% of agricultural inputs in Egypt are imported, starting from seeds and pesticides to fertilizers and nutrients. This makes farmers directly exposed to any fluctuation in the exchange rate. Each time the dollar rises, the cost of agricultural production increases accordingly, aggravating the plight of farmers who are already struggling with higher fuel and labor costs and declining profitability in farming.
He added that fertilizers, as one of the most critical components of agricultural production, face a clear gap between the state’s subsidized allocations and the actual needs of farmers. This gap forces many to buy extra quantities from the free market at exorbitant prices — sometimes up to four times higher than the subsidized rate. With inadequate oversight and the emergence of a black market, production costs soar to unsustainable levels, ultimately driving up food prices for consumers.
According to the expert, some crops have been more severely affected by these conditions than others, especially potatoes and onions. Farmers complain that the cost of cultivating one feddan (around 1.038 acres) has sometimes exceeded the expected return from sales — particularly when prices drop at the point of supply or in the absence of fair pricing mechanisms. He emphasized that this situation not only threatens farmers’ livelihoods but endangers Egypt’s overall food security, since potatoes are a staple in daily consumption and onions are a strategic crop used in most food industries.
He also pointed out that the continuation of these conditions without structural solutions is deepening the crises of the agricultural sector. The problem, he said, does not lie with farmers themselves but with the absence of clear policies to support production inputs and regulate markets — a reality that places the future of Egyptian agriculture before serious challenges requiring urgent government intervention.
The ongoing surge in fertilizer prices is attributed to a set of interrelated factors, foremost among them the rise in natural gas prices — the main raw material for producing nitrogen fertilizers such as urea and nitrate. Recent regional tensions in the Middle East led to a 50% disruption in gas supplies last May, which lasted for nearly two months, causing several factories to suspend operations and reducing local production by about 20%. Moreover, the government’s decision to increase fertilizer export quotas from 45% to between 55% and 63% of total output further limited local availability, creating a black market and pushing prices up by as much as 40% during certain periods.
However, on July 20, the government announced the resumption of full natural gas supply to all fertilizer plants, following the activation of the second and third regasification ships, which restored production to 100% capacity.
In addition, the reduction of government subsidies and the increase in the gas price supplied to factories — from $4.5 to $5.5 per million British thermal units — further raised production costs. Global factors such as the war in Ukraine have also influenced global demand and helped boost Egyptian fertilizer exports, which reached $1.359 billion in the first half of 2025.
IMF Cuts Egypt’s Growth Forecast Amid Soaring Inflation Concerns
Is Export the Cause?
Despite the record surge in fertilizer prices, official data from the Export Council for Chemical and Fertilizer Industries revealed that Egypt’s exports in this sector witnessed notable growth during the first half of 2025. The total value of exports rose to about $4.6 billion, marking a 13% increase compared to the same period last year. Fertilizer exports topped the list of exported products, reaching approximately $1.359 billion.
Reports indicated that fertilizer products such as phosphate urea and nitrate contributed the largest share of these revenues, driven by high demand in European and Asian markets, as well as the continuation of long-term contracts with several importing countries. This performance reflects the role played by the chemical and fertilizer industries in strengthening Egypt’s trade balance surplus and boosting foreign currency revenues. Officials at the Export Council also stated that government plans currently focus on diversifying export markets and enhancing the added value of products through expanding downstream industries and developing ports and logistics services — measures aimed at improving the competitiveness of Egyptian exports in global markets.
Egypt’s agricultural sector requires around four million tons of fertilizer annually, divided between the summer and winter growing seasons. Farmers receive allocations ranging from three to six sacks per feddan, with each subsidized sack priced at about 250 pounds ($5.21), while in the open market prices range between 950 and 1,000 pounds ($19.79–$20.83), according to the head of the Farmers’ Syndicate, Hussein Abu Saddam, who spoke to Zawia3.
Abu Saddam explained that farmers often need to buy additional sacks at free-market prices, particularly since many farmlands lie outside the official agricultural holding system through which the Ministry of Agriculture distributes subsidized fertilizers. This, he said, turns the cultivation of a single feddan into a financial burden that exceeds the annual return, especially in poor-quality soils that require large quantities of fertilizer — making the government’s decision to lift subsidies a crushing weight on farmers.
He added that farmers’ fertilizer needs differ depending on soil type: some fertile lands require limited quantities, while weaker soils demand specific fertilizers in large amounts. For this reason, the removal of fertilizer subsidies represents a significant burden on farmers, Abu Saddam emphasized.
Commenting on the crisis, academic and economist Karim El-Omda explains that Egypt is among the world’s fertilizer-producing and exporting countries. However, the continuous rise in natural gas prices — the main input in fertilizer manufacturing — has directly affected the domestic market. He notes that the period during which gas supplies to factories were suspended, followed by the government’s decision to impose successive price increases, has caused major spikes in production costs, to the extent that energy alone accounts for nearly 60% of the fertilizer price in some types.
El-Omda points out that fertilizer production in Egypt is divided into three portions: the first directed toward exports, making up roughly half of total output; the second tied to specific contractual obligations; and the third allocated to the local market — about 37% of total production under a government agreement to meet farmers’ needs. In reality, however, he says this share rarely reaches agricultural cooperatives in full, or arrives in much smaller quantities than required, leaving the door wide open to black-market activity.
The professor of economics stresses that the surge and scarcity of fertilizers have had a direct impact on Egypt’s agricultural costs, pushing up prices of vegetables, fruits, and animal feed — and consequently, the prices of meat and other basic products. He adds, “Fertilizers are not just a production commodity; they are a fundamental input that immediately and directly affects people’s lives and their food security.”
Global Warnings of a Food Crisis
In June, the CEO of Yara International, one of the world’s largest fertilizer companies, warned that escalating tensions in the Middle East could pose a new threat to global food price stability due to their direct impact on vital supply chains for crop nutrients and energy. In statements quoted by the Financial Times, he noted that the risks surrounding the Strait of Hormuz — through which 40% of global urea exports and 20% of liquefied natural gas flows pass — are being closely monitored by fertilizer companies and their clients, as any disruption there could have a far-reaching effect on food production. He added that markets have already experienced sharp fluctuations recently, underscoring how regional security is closely intertwined with global supply stability.
Svein Tore Holsether, Yara’s CEO, explained that the recent shutdown of Israeli gas fields disrupted fertilizer production in Egypt — a stark example of how quickly the ripple effects of regional crises can reach production lines. This disruption coincided with heightened tensions between Iran and Israel, which pushed energy prices upward, with Brent crude surpassing $80 per barrel before falling back to $60 after a ceasefire agreement.
Industry experts have warned that these conflicts could lead to the suspension of more than one-fifth of global urea production, particularly with Iran shutting down its ammonia plants for security reasons and continued disruptions in Egypt due to halted gas flows. Consulting reports confirmed that the reciprocal strikes between Tehran and Tel Aviv have caused widespread turmoil in nitrogen markets and created persistent threats to the supply of phosphate, potash, and sulfur.
Holsether spoke of the fragility of the global food system, recalling that the earlier surge in energy prices during the Ukraine war in 2022 triggered a severe spike in fertilizer costs and deepened the global food crisis. Although prices later declined alongside falling gas markets, pressures persist in Europe amid rising Russian imports. He argued that Moscow has been using food and fertilizers as political and economic leverage — either by boosting exports to increase global dependence or by targeting Ukrainian agriculture. He noted that more than 20% of Ukraine’s farmland has been rendered unusable due to mines or occupation, reducing grain and oilseed production from 78 million tons in 2023 to 72.9 million tons in 2025, reflecting the war’s profound impact on one of the world’s major agricultural producers.
In Egypt, the government provides support to farmers through agricultural cooperatives and the Agricultural Bank of Egypt, which handle the distribution of subsidized inputs such as fertilizers. This system helps smallholders access in-kind loans to sustain crop production and ensure food remains affordable for citizens. However, this vital role of agricultural cooperatives has sharply declined due to neglect, as government subsidies directed to farmers through this mechanism dropped from 0.53% of the total national budget in 2007/2008 to just 0.10% in 2023/2024.
Egypt began subsidizing agricultural fertilizers decades ago as part of its efforts to stimulate agricultural production and stabilize prices. During the 1960s and 1970s, the state recognized agriculture as a vital pillar of the national economy and invested heavily in supporting farmers by providing essential inputs at low prices. Large quantities of fertilizers were made available to achieve self-sufficiency in staple crops such as wheat and rice.
Over time, subsidy policies evolved to include various types of chemical fertilizers, such as nitrogen and phosphate fertilizers, and were linked to the establishment of distribution and logistics centers to ensure farmers’ access across regions. In the 1990s, with economic liberalization, the government began reassessing its subsidy policies. Facing growing fiscal pressures, it gradually reduced support, though subsidies remained a core element of its strategy to maintain food price stability.
At the same time, the government proceeded to sell stakes in some of the largest state-owned fertilizer companies to Gulf sovereign funds, leading to a decline in the quantity of subsidized fertilizers available locally. This shortage in supply translates quickly into price increases ranging from 5% to 20% for various crops. The danger of this policy lies in the fact that the privatization of fertilizer companies threatens national food security: the private sector prioritizes profit and exports over meeting domestic needs. While private companies contribute less than 20% to meeting local market demand, they export 76.4% of their production abroad — leaving the public sector to shoulder the bulk of the burden, covering about 80% of Egypt’s agricultural needs.
Although the government has obligated the private sector to allocate 55% of its fertilizer production as subsidized supply and 10% for sale at free-market prices within the local market, this commitment has not been effectively enforced. According to a report by the Egyptian Senate, the shortage in subsidized fertilizers reached about 1.8 million tons in October 2023, as only 2.2 million tons were delivered instead of the 4 million tons required. This imbalance directly impacted fertilizer prices, which rose from 4,500 pounds ($93.75) per ton in January 2023 to an average of 17,300 pounds ($360.42) per ton in the free market, doubling farmers’ financial burdens and weakening the state’s ability to secure food at affordable prices for its citizens.
Repeatedly, reports have circulated about the government’s intention to completely remove subsidies for farmers, as part of a broader plan to reduce agricultural spending in the national budget. This comes amid soaring fertilizer production costs, which rely heavily on petroleum derivatives and imported materials purchased in foreign currency — both of which the government itself struggles to provide.
A study issued by the Senate in October 2023 highlighted that the chemical fertilizer industry is one of Egypt’s most important strategic sectors, offering a clear comparative advantage. Its significance stems not only from its direct connection to food security but also from its role in supporting agricultural development plans, increasing productivity, and generating major economic returns through exports. The study emphasized that achieving food security requires an integrated system for fertilizer production and supply — ensuring adequate quantities at reasonable prices for farmers — especially amid rising global demand and mounting pressures from climate change.
Despite this critical importance, the study identified a number of challenges undermining the industry’s ability to meet domestic needs. Chief among these problems is the failure of some factories to deliver their mandated share of production to the Ministry of Agriculture, creating a clear gap between market demand and actual supply. The wide price disparity between subsidized fertilizers — capped at around 4,500 pounds ($93.75) per ton — and high global market prices has also fueled the black market, as companies find exports far more profitable than domestic sales.
The study further pointed to rising production costs — including fuel, transportation, spare parts, and labor — as well as insufficient financing from the Agricultural Bank of Egypt and limited storage capacity in several companies. The crisis has been compounded by certain farmers’ practices, such as excessive use of nitrogen fertilizers or applying fertilizers to non-essential crops.
To address these challenges, the Joint Committee of the Senate recommended developing a comprehensive national plan for fertilizer production, distribution, and export. The plan should include a clear fertilizer map and require factories to consistently supply their designated quotas, while also standardizing prices to prevent manipulation.
The recommendations further stressed the need to develop a balanced fertilizer policy aligned with soil types and crop cycles, expand the establishment of new plants and storage facilities, and increase investments directed toward the sector. The study also called for strengthening oversight of agricultural cooperatives and traders to prevent monopolies and ensure that subsidies reach farmers. It urged a review of input pricing, such as gas and electricity, to guarantee industrial sustainability, and proposed adopting a long-term strategy through 2030 to shift subsidies from in-kind to cash-based support.
Finally, it emphasized the importance of upgrading the “Smart Farmer Card” system to better regulate fertilizer distribution and ensure fair access to subsidies for smallholders across Egypt.
