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Iran war: As fertiliser prices jump, ‘your ingredient costs will follow’

The US-Israeli war on Iran is hitting the food industry with higher fuel prices, reduced fertiliser availability, and closed trade routes – and the impact could be long-lived, say experts.

UN climate chief Simon Stiell told EU policymakers this week that the disruption in global energy markets following the Iran war is an “abject lesson” in the risks of relying on fossil fuels. The price of crude oil jumped to over $100 (€87) per barrel last week, before falling back slightly. The market is ebbing and flowing with the headlines: what was a few days ago a quick war is now possibly a long drawn out conflict not dissimilar to the one in Iraq.

The current volatility is being driven by the halting of liquid natural gas (LNG) and oil exports through the Strait of Hormuz, alongside intensifying attacks on energy infrastructure in Iran’s neighbouring countries, explained Matt Hopkins, head of risk management at Consultus International, an energy consultancy. “As a result, markets are rapidly pricing in additional risk premium,” he told Ingredients Network.

Fishers are similarly likely to fall foul of rising fuel prices. Similarly, producers on land could find themselves in a game of Catch 22: to delay sowing or harvesting in the hope pressure eases or swallow the fuel premium and continue as planned.

As fertiliser prices jump, ‘your ingredient costs will follow’

Staples including wheat, corn, rice, soy, sugar, and animal feed travel through the Strait on their way to the Gulf countries, for example, while some 30% to 40% of the world’s traded nitrogen fertilisers are believed to move the other way through this corridor.

Food is among the five most impacted products, with businesses redirecting supply “en masse” to mitigate the impacts of these external forces. But the risks increase with each geopolitical shift, as climate change and the biodiversity crisis pile on yet more pressure.

As Ana Maksimovic, an advisor to EU food and beverage brands on sustainability, explained on her website, fertiliser “rarely makes the dashboard” when it comes to the tracking focus of most business leaders, but it is “embedded in almost everything you source – from what flour to soy protein to the corn syrup in your supply chain”.

And fertiliser prices have just jumped €70/tonne, so “your ingredient costs will follow”, she explained, which means food companies need to be mapping their fertiliser exposure.

In early March, Middle East granular urea prices rose by nearly 20% compared to late February levels, while other fertiliser prices, such as diammonium phosphate, also rose. The Food and Agriculture Organisation (FAO) of the UN has estimated that global fertiliser prices could average 15-20% higher during the first half of 2026 if the crisis continues.

The FAO Food Price Index remains below the peak levels recorded during the 2022 global food price spike following the war in Ukraine, but has begun to rise again, reflecting renewed uncertainty in global commodity markets, reported the FAO in mid-March in its briefing: Global agri-food implications of the 2026 conflict in the Middle East.

“When fertiliser and fuel become more expensive, farmers adjust by applying less fertiliser or planting fewer acres,” wrote Bram Govaerts, director general of CIMMYT, the International maize and wheat improvement centre, in a blog focused on the repercussions of the US-Israel attack on Iran in relation to food supplies. “As a result, yields decline, and the effects ripple through the entire food system. From farmers and truckers to food processors, the supply chain passes along higher costs until they reach households’ grocery bills,” he added.

Consumers will feel higher prices in six weeks

If the disruption continues, consumers in the West could see higher prices for bread within six to 10 weeks, eggs within a few months and pork and broiler chicken within six months, Raj Patel, food system expert at the Lyndon B. Johnson School of Public Affairs, University of Texas, told the Financial Times.

Gary Lewis, head of business development and sustainability at KTC Edibles and president of the National Edible Oils Association in the UK, said some commodities have already been affected by the current Middle East conflict, but not all. “[...] there is little impact on products like palm oil or coconut oil, as many vessels have been avoiding the Gulf for over a year due to the risk of attack,” he told Ingredients Network.

The impact on the crude oil and gas market or liquified gas has brought a “strong reaction” in world crude (mineral) oil markets, said Lewis. This has resulted in higher rapeseed, palm oil and soy oil markets, although prices are starting to ease: “Some prices are over £20-£30 (€23-35) per tonne higher, given the link to the biodiesel market. Higher crude oil markets can improve biodiesel margins, and there are already expectations of higher demand for US soy oil and European rapeseed oil in the use of biodiesel,” he explained.

Indeed, what began as a security story about fuel has quickly become about food too. This is not surprising, noted many industry observers, who pointed to the similar warnings when Russia invaded Ukraine, severing two of the world’s most important grain exporters from global supply chains almost overnight.

Import-dependent countries feel the pressure

At that time, countries dependent on imports “felt pressure immediately – on price, on availability, and on political stability”, explained Krishna Kumar, founder and CEO at CropIn Technology, an AI platform for agrifood. Kumar noted how tariff wars have “rewired decades-old trade flows with little warning. And through all of it, climate change has continued its quieter but more permanent work: droughts, floods, erratic monsoons, and heatwaves across the world’s breadbaskets. The pattern does not change. The names and geography do”, he explained.

Concentration, complacency, crisis, and costly scramble are themes that run through the food system as businesses continue to react rather than prepare. Governments, noted some experts, are also asleep at the wheel.

“[H]ow many such shocks can a highly import-dependent food system absorb before real pressure begins to show?” said Chris Elliot, Bualuang professor of food security at Thammasat University, Thailand, and founder of the Institute for Global Food Security at Queen’s University, Belfast, UK.

With the Strait of Hormuz restricted due to conflict, tariffs building weekly, and tech attacks taking hold on trade, delays on both sides of the Atlantic are now averaging 4.67 weeks, according to research by supply chain network Vinturas involving more than 400 US and UK supply chain leaders.