Volodymyr Kolot: War in the Middle East Could Trigger a Price Shock in the Nitrogen Fertilizer Market
Geopolitical escalation in the Middle East could lead to a price shock in the global fertilizer market and significantly impact agricultural economies, including Ukraine’s. This is discussed in a column by Vladimir Kolot, a partner at Agro Gas Trading, published on the Interfax-Ukraine platform.
As Kolot notes, the Middle East is one of the world’s key centers for nitrogen fertilizer production; in particular, the Arab monarchies control one-third of global urea exports. Any disruptions in the region’s energy, manufacturing, and logistics infrastructure immediately affect global supply chains.
“If the war in the Middle East drags on (and terms like ‘until September 2026’ are already being bandied about), the oil and gas, port, and industrial infrastructure of the Arab monarchies will suffer systemic damage. Consequently, the supply of fertilizers on the market will shrink, and prices will skyrocket. No one can say at this point where the price rally will stop,” notes the AGT partner.
According to Kolot, rising fertilizer prices have a domino effect on the global agricultural market, as they directly impact the cost of food production, which in turn could trigger outbreaks of armed conflict:
“The Food and Agriculture Organization of the United Nations (FAO) Food Price Index is highly sensitive to such fluctuations. Historically, sharp increases in the prices of grain and other staple foods have often led to socio-political instability. Examples of this could be observed in the run-up to and during the Arab Spring, which began in Tunisia in 2010.”
For Ukraine, the consequences of the war in the Middle East could manifest themselves in several areas at once—energy, industry, and agriculture.
In particular, rising gas prices could make the production of nitrogen fertilizers at Ukrainian enterprises economically unviable, while increased imports will put additional strain on the country’s logistics system. At the same time, Kolot emphasizes the need to resume discussions on restarting the Odesa Port Plant to mitigate risks in the Ukrainian fertilizer market.
“The current situation in the Middle East is yet another reminder of how interconnected the global economy is. Events thousands of kilometers away from Ukraine can determine the price of gas, fertilizers, and, ultimately, the bread on every family’s table.
That is why the key task today is not only to respond to the crisis but also to build a more resilient system for ensuring agricultural production. After all, food security is not just an economic issue but also a matter of national and global stability,” concludes the AGT partner.
The full text of Volodymyr Kolot’s column is available on the Interfax-Ukraine news agency portal: https://en.interfax.com.ua/news/blog/1150991.html