Middle East conflict sends global fertiliser prices soaring by 44%
Global fertiliser markets are facing fresh disruptions as the conflict in the Middle East pushes prices higher. Hungary has now called on Brussels to relax restrictions, citing difficulties in sourcing affordable imports. Meanwhile, Russia stands to gain from the turmoil, with its dominance in fertiliser trade surpassing even its influence in oil and gas. The price of urea from the Middle East has jumped by 44% since the start of the US-Israel conflict with Iran, now exceeding $670 per tonne. This surge has left countries like Hungary struggling to secure cheaper alternatives, prompting its request for the EU to loosen fertiliser trade rules.
Russia has already taken steps to control its own supplies. Earlier this year, it temporarily banned ammonium nitrate exports to support domestic producers. While the country cannot fully replace the disrupted Middle Eastern volumes, its position in the global fertiliser market remains stronger than in oil and gas. The US has also adjusted its stance by easing sanctions on several Belarusian fertiliser producers. This move could allow more exports to flow into international markets. Yet, with fertiliser prices climbing, Russia is well placed to leverage its exports as a countermeasure against Western sanctions. The war's impact on agriculture may shift further in Russia's favour over time. Moscow is already seeing windfall gains from oil sales, with an estimated $150 million in extra daily revenue since the conflict began. Projections also show Russia's wheat exports rising to 45.7 million tonnes by 2026, up 1.3 million from previous estimates.
The fertiliser market remains under pressure as prices climb and supply chains adjust. Hungary's call for EU intervention highlights the strain on importers, while Russia's export controls and strong market position reinforce its ability to navigate sanctions. With no immediate end to the conflict in sight, further shifts in trade dynamics are likely.
