UK farmers are facing fertiliser prices that have more than doubled as the Middle East conflict disrupts supply — a spike set to ripple through the supply chain and trigger a fresh bout of food inflation.
Sky News says it has spoken to British fertiliser importers, farmers and growers who have reported that their costs have risen exponentially as the war pushes up the prices of synthetic fertiliser – costs that are likely to be passed onto consumers if the war continues to escalate.
Synthetic fertiliser is an energy product, dependent on the same natural gas that is used to heat UK homes. Processed ammonia – urea or ammonia nitrate – is the raw material of synthetic fertiliser, and up to 30% of the normal supply passes through the Gulf, according to Sky. As a result, Iran’s effective closure of the Strait of Hormuz is pushing up prices.
The price of urea has more than doubled from $300 a tonne at the close of last year to nearly $700 now. For farmers, that means paying twice as much to fertilise their crops, or go without, which could have a devastating impact on yields.
Fertiliser supplier Nitrasol told Sky they will honour existing contracts with customers that were agreed before the war but beyond that, prices will inevitably have to rise.
This leaves the UK facing the possibility of a food inflation spike for the second time in four years.
What this means for retailers
For retailers, particularly those in the grocery sector, another wave of cost pressures could hit at the worst possible time. Many have only recently started to recover from the inflation surge of 2022–2023, and margins remain thin across categories such as fresh produce, dairy and bakery.
Rising fertiliser prices flow quickly through the supply chain, increasing growers’ production costs before trickling into wholesale contracts and supermarket negotiations. Retailers may try to absorb some of the impact to remain competitive, but with energy, labour and logistics costs also elevated, there is limited room to manoeuvre.
This instability also threatens long-term planning. Retailers relying on domestic supply partners may face reduced availability if crop yields fall, forcing them to seek more expensive imports. That, in turn, increases exposure to global commodity volatility and transport risks – exactly the pressures many have been working to mitigate since the pandemic and the Ukraine war disrupted supply chains.
For consumers, this means an unwelcome rise in food prices at a time when many households are already feeling the pinch of rising costs and growing unemployment.
Looking ahead
The UK may be thousands of miles from the Strait of Hormuz, but the ripple effects of conflict are already reaching British fields, supermarket shelves and household budgets. If fertiliser prices remain elevated, another painful chapter of food inflation could be just around the corner – and neither retailers nor consumers are prepared for a repeat performance.
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