Panic on the fertilizer market: prices have risen sharply due to the conflict in the Middle East
6 March 17:30
Logistical problems in the Strait of Hormuz, which arose against the backdrop of escalation in the Middle East, caused a sharp rise in the price of ammonia, a key raw material for the production of nitrogen fertilizers. This immediately affected prices for Ukrainian farmers.
According to Latifundist .com, the global price of urea jumped by almost $200 per ton in just three days, from March 2 to March 4, reports "Komersant Ukrainian".
Why fertilizers have become more expensive
Any disruptions in transportation through the Strait of Hormuz affect the global energy market. A significant portion of oil and energy supplies from the Persian Gulf pass through this narrow sea artery.
The rise in energy prices increases the cost of producing ammonia, which is the main raw material for nitrogen fertilizers. As a result, urea, one of the key types of fertilizers for agriculture, is also becoming significantly more expensive.
According to estimates by Agropartner, after taking into account VAT, customs duties, and logistics, Ukrainian farmers would have to pay approximately 10,000 hryvnia more per ton.
Demand has virtually stopped
Managing partner Leonid Shnaidman explains that at such prices, the market has virtually come to a standstill.
According to him, even if fertilizers are physically available in warehouses, farmers are not willing to buy them at the new price.
“At this price, farmers do not need urea. There are no alternatives, so there is panic on the market now,” he said.
The market is waiting to see how events unfold
Market participants are now taking a wait-and-see approach and closely monitoring events in the Middle East. Further price dynamics will depend on how long the conflict lasts and whether restrictions on shipping through the Strait of Hormuz remain in place.
A similar situation already occurred in 2025: at that time, due to fears of escalation in the Middle East, urea rose in price by $70 per ton in two days, but quickly fell in price after the situation stabilized.
Tensions in the Middle East have already begun to affect other segments of the Ukrainian agricultural market. In particular, they are affecting the cost of imported fertilizers and grain export logistics.
The increase in fertilizer costs may also affect the cost of the future harvest if prices do not stabilize before the start of the active phase of field work.
