Military actions in Middle East trigger price surge for UAN, urea in Ukraine – analysts
Prices for nitrogen fertilizers in Ukraine rose sharply during the first week of March: the average cost of UAN (urea-ammonium nitrate solution) increased by approximately UAH 1,000 per tonne, while urea rose by almost UAH 1,500 per tonne, according to the Electronic Grain Exchange.
According to the report, the traditional seasonal price increase accelerated due to military actions in Iran. The situation in the Persian Gulf is forcing farmers to intensify purchases in order to avoid shortages during the peak of the spring campaign.
"The global nitrogen fertilizer market is shocked by the situation in the Middle East, because a significant share of supplies of raw materials and finished products passes through the Strait of Hormuz. If the hostilities drag on, fertilizers will continue to rise in price, which will sharply change the profitability of growing agricultural crops, since fertilizer costs account for 40–50% of the cost of grain production," experts at the Electronic Grain Exchange said.
According to analysts at Rabobank, Middle Eastern countries account for 44% of global urea supplies and 27% of ammonia supplies. At present, the war with Iran is influencing prices mainly through higher energy costs and increased freight rates.
As reported, the cost of the 2026 sowing campaign for Ukrainian farmers will increase by about 15% compared with last year, reaching approximately UAH 700 billion ($17 billion). According to the Ukrainian Agri Council, the main factors behind the increase are higher prices for fuel (up 10–15%), mineral fertilizers (up 20%), as well as crop protection products and seeds.
Due to weather conditions in certain regions, the mass start of field work is expected to be delayed by about two weeks, while in the southern regions the sowing campaign is already actively underway. According to experts, the rise in production costs could lead to food price increases of 3–5%.