US and Israeli strikes on Iran in late February have triggered a period of uncertainty in the Middle East, bringing with it a host of problems not only for the region but also for the world, and concerns about fertilizer shortages have added to the turmoil, Reuters reported.
Australian conglomerate Wesfarmers said the war could delay some shipments of ammonium phosphate and urea, which are used in agricultural fertilizers. The fighting in the Middle East has forced the region’s fertilizer plants to close and severely affected logistics, potentially limiting access to fertilizer as Asian farmers prepare for planting.
Reuters reports that the world’s most populous countries, India and China, as well as major agricultural exporters Australia and Indonesia, could face shortages of raw materials needed to make fertilizers such as nitrogen and phosphate-based fertilizers.
Qatar Energy has halted production at the world’s largest urea plant after the company cut off natural gas supplies due to attacks on its liquefied natural gas storage facilities. Elsewhere in the Middle East, sulfur processing has been halted. Fertilizer expert Josh Linville said that since the conflict began, the world has lost production from the three largest urea exporters, and the three largest anhydrous fertilizer exporters – Qatar, Iran and Saudi Arabia – have lost their supply. Linville said India had recently signed a deal to buy 1.3 million tonnes of urea, some of which was likely to be sourced in the Middle East.
India buys about 40% of its urea and phosphates from the Middle East,
and the manufacturing sector is already feeling the pinch. Three Indian fertilizer plants have already reduced urea production due to the disruption of liquefied natural gas supplies from Qatar.
The global fertilizer market was already quite tight – China has limited exports this year to ensure availability for local buyers, while many European producers reduced volumes when natural gas purchases from aggressor Russia were stopped. China is likely to tighten controls on fertilizer exports due to the Iran conflict, but it will not talk about it widely, passing information only to manufacturers and customs.
If problems in supply chains continue, consumers will also feel the price increase in the coming weeks, first with rising bread prices. In addition to rising prices, a shortage of fertilizer will also reduce harvests, which means a potential famine in certain parts of the world.
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