Nitrogen fertilizers in Ukraine have risen sharply in price due to the war in Iran

During the first week of March, prices for nitrogen fertilizers in Ukraine increased sharply. In particular, the average price for UAN increased by approximately UAH 1,000/t, and for urea - by almost UAH 1,500/t.

The traditional spring price increase this year has 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 material and finished product shipments pass through the Strait of Hormuz.

The difficult situation in the Persian Gulf is forcing Ukrainian farmers to purchase fertilizers in advance to avoid possible supply disruptions and the risks of further price increases.

However, the market understands that the further development of the situation will depend on events in the Middle East. In the event of prolonged hostilities or new logistical complications, fertilizers will continue to rise in price, which will increase farmers' costs during the spring sowing campaign. The cost of fertilizers is 40–50% of variable costs in grain production, so their increase in price will dramatically change the profitability of growing crops.

According to Rabobank experts, Middle Eastern countries provide 44% of global urea supplies, 27% of ammonia supplies, and about 25% of phosphate fertilizer supplies.

Currently, world stocks of grains and oilseeds remain quite high, so the war with Iran is still affecting prices mainly through rising energy costs and freight costs.