Fertilizer is a critical input for agricultural productivity, and its increased use has been closely associated with rising agricultural yields in many countries. In developing economies that rely heavily on fertilizer imports and are home to vulnerable smallholder farmers, fertilizer price spikes can pose serious risks. When farmers lack access to effective risk-sharing mechanisms, sudden or excessive increases in fertilizer prices can discourage adoption, disrupt planting decisions, and reduce productivity.

Over the past decade, the world’s food systems have faced multiple significant shocks, from the COVID-19 pandemic and the impacts of the Russia-Ukraine conflict to numerous climate change-driven natural disasters and instances of civil unrest and political instability. These challenges have disrupted markets, driven up food and fertilizer prices and price volatility, reduced food availability and accessibility, and pushed millions of people into hunger.