TORONTO — As shipping constraints in the Middle East disrupt global fertilizer supply and drive up prices, a new TD report says Canada is better positioned to face any inflationary pressures on its food production — at least in the short run.

Canada’s fertilizer imports from the Gulf region are less than five per cent, limiting its exposure to the ongoing war in Iran. That’s lower than Mexico and the United States, which roughly import 30-40 per cent of nitrogen-rich urea from that region.

TD economist and report author Anusha Arif says Canada sits in a distinct position as the world’s largest potash exporter, offering farmers some relief. Meanwhile, the country entered the year with stronger inventories of canola and corn that offer some short-term stability.

However, soybeans remain a weak point with significantly lower inventory from a year ago. The crop also relies heavily on nitrogen and can’t be substituted with potash, which could mean a drop in yields.

Arif estimates a two-to-five per cent food production shortfall could add around 0.1 to 0.5 percentage points to food inflation in 2027.

But she says the impact on headline inflation is expected to remain contained.

This report by The Canadian Press was first published May 11, 2026.

The Canadian Press