Disruption to the fertiliser trade has hit Irish farmers in the last few days, with a number of Irish companies essentially not quoting for any products and others pulling any agreed prices with farmers and purchasing groups.

The disruption is centred around the conflict in the Middle East and the fact that ships carrying urea in particular cannot get insured to travel through the Straight of Hormuz, a strategically important shipping route.

Urea prices are also highly correlated to gas prices, which have taken a jump since the conflict began. Diesel prices have also increased in recent days, with Brent Crude oil rising 14% in the last week.

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The last time there was disruption to the fertiliser trade was in 2022 due to the Russian invasion of Ukraine. There was a lot of panic buying that spring which distorted supply and demand.

Speaking to industry sources, with the exception of urea, there is enough fertiliser in the country for first applications for grazing and first cut silage. The problem is the replacement cost of product. The advice is buy what you need until April/May and reassess the situation.

Should the conflict end, things could return to normal very quickly. The conflict in the Middle East shouldn’t be used by fertiliser companies as an excuse to hike prices.

When the Carbon Border Adjustment Mechanism (CBAM) tariff was introduced, the European Commission said it could temporarily suspend the tariff if there was evidence of market disruption.

Given the uncertainty and disruption surrounding fertiliser markets in the coming months, the suspension of CBAM could help minimise price impacts on farmers.

For more see p26-27 of the Irish Farmers Journal.