Norwegian Fertilizer Giant Sounds Alarm: Middle East Conflicts Could Lead to Peat Shortages and Rising Food Prices

Svein Tore Holsether, the CEO of Yara International, recently shared insights on fertilizer markets, which have become quite unstable. He noted that the interplay between geopolitical issues and agriculture has never been more apparent.

Yara, based in Norway, aims to “responsibly feed the world and protect the planet.” The company is focused on sustainable practices, reducing emissions, and promoting low-emission energy. Their vision is to create a food system that benefits everyone while ensuring long-term sustainability in food supply.

Recent events have shown how quickly tensions can impact production. For example, the shutdown of Israeli gas fields has affected fertilizer production in Egypt. This disruption exemplifies how geopolitical conflicts can ripple through global supply chains.

A report highlighted that over 20% of global urea production has halted due to the ongoing Israel-Iran conflict. Urea is crucial for agricultural practices as it is a primary nitrogen source in fertilizers. More than 90% of industrial urea is used as fertilizer, making it essential for modern farming.

The effects of this disruption are widespread. Iran has closed its ammonia plants for security concerns, and Egypt’s fertilizer production has been compromised due to the interrupted gas supply. These challenges have created volatility in the nitrogen market and jeopardized the availability of other important fertilizers like phosphate and potash.

To put this in context, the last major upheaval in fertilizer markets happened in 2022 when Russia invaded Ukraine. This event drastically increased natural gas prices, which in turn caused fertilizer prices to rise sharply, contributing to a significant global food price crisis.

In light of these events, experts warn about the potential long-term implications for agriculture worldwide. As agricultural practices rely heavily on fertilizers, any disruption can have serious consequences for food security. Understanding these dynamics is vital for anticipating future challenges in the food supply chain.

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