A number of recent conflicts throughout the Middle East could impact the fertilizer market—including last weekend’s drone attack on a military base in Jordan that killed three American soldiers and injured more than 40 others.
Josh Linville, Vice President of Fertilizer with StoneX, says U.S. involvement in the Middle East tensions could affect the availability and pricing of fertilizer this year for farmers.
“The reason this is important for nitrogen is that we’re now waiting for the response from the U.S.,” says Linville. “We’re wondering, is this just another physical attack on the Houthi rebels and it stays there? Is it also sanctions on Iran that will include urea exports?”
Linville says the response from the U.S. is causing some to worry about how it might impact the movement of fertilizer shipments throughout the region.
“If all of the sudden, we have to start talking about a story line that considers the inability to transit vessels through the Persian Gulf or the Strait of Hormuz, the world will focus on oil shipments. But, from a nitrogen standpoint, there are millions of tons of urea exports that come from countries that surround those bodies of water. If, all of a sudden, Iran starts taking shots at vessels through that area and you shut down those exports, the fertilizer markets are going to respond to that and it’s probably going to be at a higher stance,” he says.
While the probability of that situation is low, Linville says there are a lot of “what if’s” driving the fertilizer market right now.
“In terms of what we can do here at home, we need to be a little more on top of things going into this spring,” he says. “I think it’s important that we’re having conversations with our fertilizer retailers and suppliers.”
Linville says that having earlier and more often conversations with your fertilizer supplier to let them know what you’ll be looking for this year, will help the supply chain be ready and more prepared ahead of the planting season.