Middle East conflict drives global feed and fertiliser market disruptions

MEA – Global feed and fertiliser markets are under pressure as rising commodity and transport costs, linked to the ongoing Middle East conflict and the blockade of the Strait of Hormuz, disrupt supply chains and threaten livestock production worldwide.

Data from shipping organisations such as BIMCO and major carriers such as Hapag-Lloyd highlight the physical toll on global trade. 

Approximately 130 container ships, representing nearly 1.5% of global fleet capacity, currently sit stranded in the Gulf, while nearly 3% of global container volumes are unable to move. 

This paralysis has directly inflated transport costs, with Spanish feed traders reporting freight rate increases of 20% to 25%. 

These surges are compounded by a depreciating euro and volatile currency markets, forcing buyers to postpone purchases and operate on a “hand-to-mouth” basis, securing supplies only when stocks are critically low.

The impact on livestock producers is immediate and severe

In Spain, feed prices have surged amid higher freight rates and limited market offerings. 

The Spanish feed association ASFAC and local traders report that soybean meal is in tight supply, while corn prices have risen. 

According to S&P Global Platts, EXW Spain soybean meal climbed US$42/mt month-on-month to US$431/mt, and EXW corn increased US$11/mt to US$264/mt by March 31. 

Transport costs have also risen due to fuel price spikes from supply disruptions, affecting the movement of pigs to slaughterhouses. 

Despite these pressures, Spanish pork sales and slaughterhouse deliveries have continued without delays, and no animal welfare issues have emerged.

The conflict’s impact is not limited to Europe. 

The blockade has triggered systemic shocks in energy, feed, and fertiliser supply chains. 

According to Aidan Connolly, President of AgriTech Capital, rising corn and soybean meal prices are pushing feed sector profitability into negative territory in regions like China, where feed prices have climbed 4–8% since the conflict began.

Feed additives, particularly those derived from petroleum, have also experienced significant volatility. 

“The prices of lysine, methionine, and vitamins A, E, and B5 have risen up to 10%, with even greater fluctuations in some regions,” Connolly said.

Fertiliser volatility and future crop yields

Fertiliser markets are facing acute disruption. 

Dmitry Baranov, a senior analyst at Finam, warned that nearly a third of global fertiliser exports are affected, with shipments of urea and ammonia from Iran, Qatar, Saudi Arabia, and the UAE stalled due to the Strait of Hormuz blockade. 

He forecasted a 25–45% rise in fertiliser prices if the conflict lasts three months, and up to 90% if it becomes prolonged, threatening future crop yields of corn and soybean, the backbone of animal feed worldwide.

Alexander Belogoryev, Research Director at the Institute of Economics and Finance, Moscow, highlighted that seaborne urea trade is down by nearly 33%, and nitrogen fertiliser volumes have fallen by 20%, amplifying price pressures along the feed value chain.

Producers are increasingly pivoting to alternative solutions. 

“The conflict has transformed feed from a commodity business into a high-stakes logistical challenge,” Connolly said. 

Companies are seeking alternative proteins, local supply contracts, and new shipping routes to mitigate risk. 

Similar strategies were briefly observed during the COVID-19 pandemic, but the current crisis is expected to have more sustained effects due to the scale and duration of the disruptions.

Traders in Spain report that some feed formulas can be adjusted, but soybean meal remains irreplaceable in terms of efficiency. 

Platts assessed the EU pork market down 6.4% month-on-month to US$ 3,373/mt on March 31, reflecting cost pressures. 

Analysts warn that without prompt mitigation, rising feed and fertiliser costs could cascade through livestock and crop markets globally, driving higher food inflation by the end of the year.

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