New Zealand farmers are facing significant increases in fertiliser costs this spring amid escalating geopolitical tensions in the Middle East and ongoing conflict in Ukraine. The unrest has disrupted key supply chains and driven up global energy prices, influencing the fertiliser market worldwide.

The Middle East’s role as a major supplier of natural gas and mineral resources places it at the centre of global fertiliser production. Renewed hostilities in the Persian Gulf, coupled with a near closure of the Strait of Hormuz, have contributed to rising Brent crude oil prices, which recently hovered around US$90 per barrel. Russia, a major exporter of fertiliser and energy, is also under pressure due to military actions linked to the Ukraine conflict, further tightening supplies on the global stage.

Mike Whitty, chief operating officer of Ravensdown, a farmers’ cooperative controlling approximately half of New Zealand’s fertiliser market, highlighted the compounding effects these factors have had on prices over recent months. Speaking on a national radio program, Whitty noted that, although Ravensdown maintains strong inventories both domestically and in transit, the overall market remains uncertain and volatile.

“Nitrogen-based fertilisers have experienced sharp price increases,” Whitty said, referencing reports indicating a 43% rise in costs for the average dairy farmer this spring. “Prices have softened somewhat but are beginning to climb again as conflict resumes.” He emphasised that while the immediate supply for spring is relatively secure, ongoing volatility driven by geopolitical developments and energy costs poses a continuing challenge for the farming sector.

Whitty also pointed to the impact of Ukraine’s attacks on Russian energy infrastructure, which have reduced Russian exports of both energy and fertiliser, further constraining global availability. However, he stressed that New Zealand’s production of superphosphate relies on imported raw materials from Canada, Australia, and Africa, sources considered more stable. Approximately 55% of the global sulphur trade is currently unavailable due to supply chain disruptions, but Whitty indicated that New Zealand’s sulphur supply remains robust through long-term agreements.

Despite these assurances, Whitty warned that any escalation in Middle East tensions could exacerbate price pressures and supply risks. The combination of region-specific conflicts and their impact on critical raw materials and energy inputs underscores the interconnected nature of global markets and the vulnerabilities faced by New Zealand’s agricultural sector going into the spring fertiliser season.