Middle East Conflict Could Push Fertiliser Prices Higher for NZ Farmers

That's the message from the two major fertiliser co-operatives, Ballance Agri-Nutrients and Ravensdown.

Significant volumes of nutrient commodities are shipped through the Strait of Hormuz by Qatar, the United Arab Emirates, Saudi Arabia, Bahrain and Iran.

With Iran imposing a blockade on shipping through the vital sea passage, disruptions to Middle East shipping routes can affect shipping time and freight costs.

Ballance general manager customer Jason Minkhorst says fertiliser prices had seen significant price increases leading into this conflict.

"Given this latest escalation and the market's reaction, we anticipate more," he told Dairy News.

"Upcoming shipments are mostly subject to pricing at time of shipment. As a commodity, fertiliser pricing experiences movements similar to the imported oil market."

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Minkhorst is encouraging customers to work with their nutrient specialists to plan ahead.

"Thinking ahead and creating a plan early will help us make sure we have what they need, when they need it."

Ravensdown chief sales and marketing officer Daniel Pranic says the co-operative has product on hand to meet expected fertiliser demand for autumn.

"Supply is assured, with product already in New Zealand or on the water.

"We operate seasonally and, as you know, the next period of demand for fertiliser in New Zealand is some months away in spring.

"As we plan for the spring season, we will be leveraging our longstanding global supplier relationships to help secure supply of product to New Zealand."

Looking ahead to product sourcing requirements for spring, he says the price they pay for that product is yet to be determined and will depend on multiple factors, including timing and length of the Middle East conflict, and energy costs.