Fertiliser stacked in a merchant's yard. \ Donal O'Leary
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Early indications are that the conflict in the Middle East could have serious knock-on effects for the price of fertiliser over the coming months.
Iran is one of the world’s largest urea exporters and other countries in the region are both exporters of fertiliser and liquid natural gas, which is used in the manufacture of urea in other countries.
Around 35% of global seaborne urea trade is from the region involved in the current conflict.
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Early indications show that the price of fertiliser traded on global markets is already moving higher on Monday, with quotes up as much as 10% or €40/tonne when compared with prices quoted on Friday.
While much of the fertiliser supply from the Middle East is for the Asian market – particularly India – any shortage there will quickly become a global issue as those countries seek replacements from elsewhere.
Factor
The deciding factor for fertiliser prices for the year ahead will be how long the conflict lasts and how much disruption it causes.
Previous flare-ups in the region saw price surges that only lasted days.
If this one is longer or if there is major disruption to trade through the Strait of Hormuz, then fertiliser prices could be higher for longer.
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Early indications are that the conflict in the Middle East could have serious knock-on effects for the price of fertiliser over the coming months.
Iran is one of the world’s largest urea exporters and other countries in the region are both exporters of fertiliser and liquid natural gas, which is used in the manufacture of urea in other countries.
Around 35% of global seaborne urea trade is from the region involved in the current conflict.
Early indications show that the price of fertiliser traded on global markets is already moving higher on Monday, with quotes up as much as 10% or €40/tonne when compared with prices quoted on Friday.
While much of the fertiliser supply from the Middle East is for the Asian market – particularly India – any shortage there will quickly become a global issue as those countries seek replacements from elsewhere.
Factor
The deciding factor for fertiliser prices for the year ahead will be how long the conflict lasts and how much disruption it causes.
Previous flare-ups in the region saw price surges that only lasted days.
If this one is longer or if there is major disruption to trade through the Strait of Hormuz, then fertiliser prices could be higher for longer.
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