The ongoing war in the Middle East and the blockade of the Hormuz Strait are shaking global feed and fertiliser markets, with consequences ranging from soaring Chinese prices to delayed shipments in Africa. According to Aidan Connolly, President of AgriTech Capital (a think tank), the conflict has triggered systemic shocks through critical disruptions to energy and fertiliser supply chains.
Rising costs pressure producers
The impact of a global rise in feed ingredient prices for corn and soybean meal is affecting sectors and regions that were already under pressure from market prices and disease, Connolly said, adding that China, where feed prices climbed by 4% to 8% since the beginning of the conflict and feed business profitability was pushed into negative territory, is one example.
Rising feed prices have reportedly hit the Chinese pig industry particularly hard, driving the profitability of a large number of small farmers into the red.
Feed additives see price volatility
In addition, Connolly continued, the feed additive market has been disrupted, particularly for products derived from petroleum, where energy costs have a significant impact on manufacturing and, of course, transportation costs.
“The prices of lysine, methionine, vitamin A, E, and B5 have seen price increases of up to 10%, but also much greater volatility,” Connolly said.
“With nearly a third of global fertiliser exports affected and prices potentially doubling if the crisis persists, the ripple effects threaten future crop yields, feed availability, and ultimately global food security,” – Dmitry Baranov, senior analyst at Finam.
Fertiliser markets face major shock
The long-term consequences of the war can dwarf the disruptions already seen, analysts warned.
According to Alexander Belogoryev, Research Director at the Moscow-based Institute of Economics and Finance, Iran, Qatar, Saudi Arabia, and the UAE jointly account for 35% of commercial urea exports and 32% of ammonia exports.
With the Strait of Hormuz effectively closed, the “double blockade” – alongside the Red Sea crisis – has stalled nearly 33% of global seaborne urea trade and 20% of traded nitrogen fertiliser, Connolly calculated.
Higher costs threaten crop yields
The war can trigger a 25% to 45% rise in fertiliser prices, providing that the conflict lasts for up to 3 months, and a 90% spike if the war becomes long-term, forecasted Dmitry Baranov, senior analyst with Finam, a Moscow-based financial consultancy.
Analysts warned that the fertiliser market crisis can prove to be a painful blow for the feedstuff production across the world.
“This threatens future crop yields for corn and soybean, which are the most critical ingredients in animal feed,” Connolly said. “Even when feed doesn’t include these directly, it has both a direct and knock-on effect on the prices of other commodities”.
Supply chain disruptions intensify
Fertilisers spike just before the sowing season in the Northern Hemisphere and the winter crop season in the Southern Hemisphere, Belogoryev said.
This will be reflected in the rising prices along the value chain, but the impact will be delayed by months.
“By next winter, the global economy could face rising food inflation,” Baranov said.
“The conflict has transformed feed from a commodity business into a high-stakes logistical challenge, forcing producers to pivot toward alternative proteins and local ‘just-in-case’ supply contracts, even at the risk of a longer-term cost disadvantage,” – Aidan Connolly, President of AgriTech Capital.
Industry seeks alternative solutions
With major distribution hubs like Jebel Ali under threat, “last-mile” deliveries are also at risk. Consequently, feed producers are seeking alternative supply routes and ingredients.
Long-term shifts in supply chains
“The conflict has transformed feed from a commodity business into a high-stakes logistical challenge, forcing producers to pivot toward alternative proteins and local ‘just-in-case’ supply contracts, even at the risk of a longer-term cost disadvantage,” Connolly said.
A similar effect has been seen during the Covid-19 pandemic, when feed companies struggled to mitigate logistics risks and increasingly relied on alternative sources, though at that time the trend was short-lived.
