Meat & Livestock News

Global Fertiliser Prices Show Signs of Easing Amidst Middle East Tensions

31 October 2023

The global fertiliser market has witnessed a decrease in prices, but the ongoing Israel-Hamas conflict could introduce uncertainties, according to Vitor Pistoia, a farm inputs analyst at RaboResearch.

The recent Semi-Annual Fertiliser Outlook report by the agribusiness banking specialist highlighted that while the escalating tensions in the Middle East introduce some unpredictability, the current implications for the food and agriculture sectors remain manageable.

Farmers worldwide might experience some adverse effects due to potential increases in energy and fertiliser costs, as well as a slight decrease in import demand and prices for grains and oilseeds, stemming from the Israel-Hamas conflict.

Pistoia emphasised that if the conflict expands to the broader Middle East/North African (MENA) region, the repercussions on fertiliser supply, as well as demand for grain, meat, and dairy, could be significant.

The report shed light on Israel’s role as a crucial exporter of potash and phosphorus. In 2022, Israel was responsible for exporting 6% of the global potash and 8% of phosphate fertilisers. The upcoming months will determine the extent to which these trade volumes are affected.

Furthermore, the broader MENA region accounts for approximately 30% of the world’s nitrogen fertiliser exports, over 25% of mixed fertiliser exports, around 10% of potassic fertilisers, and nearly half of the phosphatic fertiliser exports.

Reflecting on the fertiliser market’s trajectory, Pistoia mentioned that 2023 has been relatively stable, serving as a transitional year, with lingering market complexities from 2022.

Rabobank’s data indicates a 3% increase in global fertiliser usage in 2023, in contrast to the 7% decline witnessed in 2022. Projections for 2024 suggest a near 5% rise in global fertiliser consumption.

Local fertiliser prices in New Zealand have seen a significant drop compared to the previous year. However, this decrease might not necessarily translate into increased fertiliser usage in the upcoming months.

Pistoia pointed out the challenges faced by New Zealand farmers, such as tight farm margins due to reduced commodity prices and elevated costs for other farm inputs, including fuel and feed.

Additionally, the recent decline in the New Zealand dollar, coupled with crude oil price hikes, raises questions about the budget allocations for increasing fertiliser application rates.