The escalation in Middle East turmoil, following the start of U.S. and Israeli military action in Iran at the end of February, is disrupting regional trade flows. Transit through the Strait of Hormuz remains a key factor. Alongside oil, gas, and freight disruptions, the closure of the strait is also affecting fertilizer flows, raising concerns among participants in the potato sector.
Rising fertilizer prices are increasing overheads, while also creating uncertainty around crop planning. With the European growing season approaching in the coming months, production decisions may be affected. Sources indicate that reduced fertilizer application could lead to lower crop quality. The level of impact varies between growers, as some have already secured fertilizer volumes for the season. However, concerns remain over longer-term supply if the conflict continues and volatility in fertilizer markets persists.
At the same time, higher input costs may influence market participation. Some sources suggest that increasing overheads could limit new entrants in an already saturated market. This comes as the sector is already facing a reduction in contracted volumes for the next season, a limited spot market, and rising input costs. Under these conditions, sources state that they "cannot imagine many will gamble with such circumstances."
Source: Mintec/Expana
