A widening geopolitical crisis is increasing fuel, fertilizer, and freight costs, with implications for the global potato sector. According to a Potato News Today analysis, the Group of Seven (G7) has raised concerns about instability in energy markets and the resulting impact on inflation, supply chains, and food systems.
In a virtual meeting on March 30, G7 energy and finance ministers and central bank governors stated they are monitoring the effects of the conflict on energy markets, the global economy, and financial stability, and indicated readiness to act to maintain market stability.
For the potato sector, cost exposure is linked to fuel, electricity, fertilizer, transport, and cold chain operations. Disruptions in these areas affect production, storage, processing, and logistics. G7 foreign ministers also warned of disruptions to economic, energy, fertilizer, and commercial supply chains.
Energy market volatility is a central factor. Reuters reported that Brent crude rose by 59 per cent in March, while West Texas Intermediate increased by 56 per cent, driven by concerns over supply constraints. The International Energy Agency confirmed that around 20 million barrels per day of crude oil moved through the Strait of Hormuz in 2025, accounting for about 25 per cent of global seaborne oil trade, with nearly one-fifth of global LNG trade also dependent on this route.
Potato production is sensitive to input costs. Guidance from the University of Idaho indicates that a Russet Burbank crop requires around 220 pounds of nitrogen and 300 pounds of potassium per acre (approximately 246 kg/ha nitrogen and 336 kg/ha potassium), while University of Maine data shows a crop may require around 200 pounds of nitrogen and 100 to 200 pounds of elemental potassium per acre (approximately 224 kg/ha nitrogen and 112 to 224 kg/ha potassium). Rising fertilizer costs, therefore, have a direct impact on production economics.
Fertilizer markets are already showing strain. India is diversifying supply sources, with the Gulf region previously accounting for 20 per cent to 30 per cent of its urea imports and about 30 per cent of diammonium phosphate imports. Officials reported higher nutrient prices and freight rates.
Logistics are also affected. Hapag-Lloyd reported additional weekly costs of $40 million to $50 million due to disruptions linked to the Middle East conflict. Shipping costs are rising due to fuel, insurance, and storage expenses, while vessel delays and rerouting are affecting reliability.
The impact varies by operation, depending on energy use, transport distances, and reliance on imported inputs. However, the current situation points to higher operating costs and increased uncertainty across the sector.
Source: Potato News Today
