The CEO of the Norwegian group Yara, Svein Tore Holseter, warned that the war in the Middle East could be a key reason for the sharp increase in food prices. It is quite possible that a war between Israel and Iran could disrupt global supply chains for fertilizers and energy.
Points of attention
- Recent volatile fluctuations in fertilizer markets underscore the interconnectedness of the global supply chain and highlight the vulnerability to unexpected disruptions.
- More than a fifth of global urea production has been halted due to conflicts and supply disruptions, with Iran closing ammonia plants for security reasons and Egypt experiencing shortages from Israeli gas supply cuts.
War in the Middle East could have really serious consequences
According to Svein Tore Holseter, fertilizer manufacturers and their customers are already "closely monitoring" the risks in the Strait of Hormuz area.
What is important to understand is that 40% of the world's urea volume and 20% of the world's liquefied natural gas pass through it.
Yara CEO warns that any disruptions could affect global product production.
According to the expert, fertilizer markets have been extremely volatile over the past two weeks, and this shows how interconnected everything is.
Against this backdrop, the recent closure of Israeli gas fields, which disrupted fertilizer production in Egypt, cannot be ignored.
It is these unexpected changes that can affect supply chains.
In addition, it is noted that more than a fifth of global urea production has been halted due to conflict and supply disruptions.
Iran has closed all ammonia plants for security reasons, and Egypt remains cut off due to the cessation of Israeli gas supplies.
