During the first week of March, fertilizer prices in Ukraine surged sharply, particularly nitrogen fertilizers, with the average price of UAN increasing by about UAH 1,000 per ton and urea rising by nearly UAH 1,500 per ton.
This was reported by the Electronic Grain Exchange.
“The traditional spring price increase this year accelerated amid the war in Iran. The global nitrogen fertilizer market is shocked by the situation in the Middle East, as a significant volume of raw materials and finished products passes through the Strait of Hormuz,” the report says.
Ukrainian farmers, due to the complicated situation in the Persian Gulf, are forced to purchase fertilizers in advance to avoid potential supply disruptions and the risk of further price increases.
However, the market understands that further developments will depend on events in the Middle East. If hostilities drag on or new logistical complications arise, fertilizer prices will continue to rise, increasing farmers’ costs during the spring sowing campaign. Fertilizers account for 40–50% of variable costs in grain production, so their price increase will sharply affect the profitability of crop cultivation.
According to Rabobank experts, Middle Eastern countries supply 44% of the world’s urea, 27% of ammonia, and about 25% of phosphate fertilizers.
Currently, global stocks of grains and oilseeds remain fairly high, so the war with Iran primarily affects prices through rising energy costs and freight rates.
