Sri Lanka imports almost 100% of the fertiliser used, so our agriculture sector is highly vulnerable to import and energy price shocks.
For the planned production in the upcoming Yala season, we require approximately over 200,000 MT of fertiliser, but we only have ~100,000 MT in stock. We do not know if this is stocks in hand or in contracts. If in contracts, the actual availability may be lower.
All countries face the same issue. A global food crisis is coming. Sri Lanka, too, will not emerge from this crisis unscathed. With this impending food crisis, there are two issues to consider: 1) availability of fertiliser and food and 2) affordability of fertiliser and food. They require different, but complementary interventions.
Fertiliser shortage
In 2025, we imported ~712,000 MT of fertiliser – 57% of it from China, which has currently banned exports of much of its fertilisers to protect its own domestic food production; ~22% came from West Asia – many of these countries are unable to get their shipments of fertiliser out due to the closure of the Strait of Hormuz. That means roughly 80% of Sri Lanka’s fertiliser imports are at risk.
On the other hand, fertiliser prices have increased significantly due to supply shortages, with many countries now vying for shrinking global stocks. In 2025, Sri Lanka spent $ 310 million on fertiliser imports. Urea prices doubled from ~$ 380 per tonne pre-war to $ 700 per tonne. But market prices don’t always reflect the actual negotiated price. India recently agreed to buy 2.5 million MT of urea at over $ 900 per tonne.
To make fertiliser affordable, the Government increased the fertiliser subsidy – Rs. 30,000 per hectare of paddy and Rs. 18,000 per hectare of other crops. Under normal circumstances, the subsidy would cover >90% of urea cost per hectare.
Urea is the most used fertiliser, although it is not the only one. Under the current subsidy, it will only cover ~60% of the urea cost per hectare, requiring an out-of-pocket injection which farmers may not be able to afford – this will affect production and therefore availability and prices.
Smallholder farmers typically cultivate 1–2.5 hectares of paddy land and may need to shell out upwards of Rs. 20,000 per hectare on fertiliser alone, not considering any other costs like fuel and labour. The out-of-pocket component could be even higher if the actual negotiated price is higher than prevailing market prices (such as in India).
Compounding the fertiliser shortage, Sri Lanka also faces water shortages due to climate change, specifically the prevailing El Niño effect and the release of water for hydropower generation. The Agriculture Ministry warns that it could impact the cultivation of ~887,000 MT of paddy (roughly one-third of over ~3 million MT of paddy production).
Food security
We also import food and other raw materials. Around 33% of Sri Lanka’s domestic supply of cereals (such as wheat, maize, and millet) is imported and about two-thirds of Sri Lankans’ dietary energy supply is derived from cereals, roots, and tubers. So, roughly 20% of a Sri Lankan’s dietary needs are at risk.
We import several staples like Mysoor dhal, potatoes, onions, chickpeas, and dairy products from countries like India and Australia, and these countries are also affected by the fertiliser shortage.
The animal feed which is imported goes into poultry production – 70% comes from the US which imports some of its fertiliser from Saudi Arabia and Qatar. Crops like corn are already set to rise in the US due to the fertiliser price hikes. Therefore, cheap sources of protein are also at risk.
Fuel shortages also affect the availability of food. Wholesale vegetable prices in the recent past have crashed due to an unavailability of wholesale buyers, affecting farmers. It also leads to higher post-harvest food waste as Sri Lanka’s main markets lack cold storage infrastructure. Sri Lanka does not have fertiliser or food buffer stocks to manage medium- to long-term disruptions.
What can be done?
This impending food crisis is a catastrophic blow to Sri Lanka’s poor and vulnerable.
During the economic crisis, Sri Lanka’s poverty rate doubled. Poverty doubled, and real wages fell by ~30%. A majority of Sri Lankans (~43% in 2024) already cannot afford a healthy diet consisting of the cheapest sources of nutrients. Child malnutrition reversed gains in 2021 and remains elevated.
Serious and immediate interventions are required to ensure Sri Lanka’s food security in the coming months considering the ongoing situation with the closure of the Strait of Hormuz. Episodes of low inflation means we have some buffers to absorb the inflationary impact; however, this will be only possible in the short- to medium-term.
To address the availability of fertiliser, Sri Lanka may need to consider cutting down on its planned production and prioritising certain crops over others. Existing stocks of fertiliser can be used more efficiently with new technologies (such as coated urea, which releases slowly), but the Government needs to urgently prepare guidelines on this and educate farmers on what to do. In the meantime, the Government can continue its negotiations with countries like China to get preferential access to fertiliser exports.
About 15–20% of harvests go to waste between farm and market – largely due to poor packing and transportation. This food waste must be curbed urgently. Better packing and transportation can be mandated. Previous attempts to do this have not succeeded due to several challenges which are complex, but not insurmountable. Cold chain logistics, where possible, can be implemented to reduce waste during transportation. One retail chain reduced its end-to-end waste to 5% with cold chain logistics management.
Unsold fruits and vegetables can be processed into value-added products (like frozen vegetables) which can be stored for future consumption. Food waste at hotels and restaurants (roughly 110 MT, of which 75% can be avoided) should be curbed urgently. Where possible, Sri Lanka must import as much food as it can, and food buffer stocks must be created.
The Government has already increased the fertiliser subsidy and increased the ‘Aswesuma’ payout. It has also initiated a fuel subsidy for fishermen. These will cushion the inflationary impact of the price hikes.
These must be monitored and, if insufficient, the Government must provide further support. We can encourage home gardening and subsistence farming where possible to serve as a food and nutrition top-up.
(The writer is Co-Founder and Director of Arutha)
(The views and opinions expressed in this article are those of the writer and do not necessarily reflect the official position of this publication)