IRAN WAR DRIVES GLOBAL FERTILISER PRICES UP, RAISING FOOD COST FEARS

MUNICH, March 28 (Bernama-dpa) – The war in Iran has resulted in a 30 to 40 per cent spike in the cost of mineral fertiliser since the start of the year, threatening international food prices, German Press Agency (dpa) reported, citing German experts.

"World market prices for nitrogen fertiliser are increasingly approaching the peak levels we saw at the start of Russia's war against Ukraine [in February 2022]," said Philipp Spinne, managing director of the German Raiffeisen Association (DRV).

In Europe, however, consumers have not yet directly felt the effects because many farmers had already purchased their spring fertiliser before the Iran war began, the Bavarian Farmers' Association told dpa.

But should the war drag on, production costs in Germany and other countries are likely to rise, and with them, producer prices, it warned.

Four years ago, the threat to global food security feared by some experts did not materialise.

This was partly because Russia – a leading fertiliser producer – benefited from the invasion of its neighbour and actually increased its fertiliser exports.

The European Union has since gradually introduced tariff increases on Russian nitrogen fertilisers.

High energy prices are primarily driving the pricing spike, with gas prices accounting for up to 90 per cent of the costs of ammonia and nitrogen production, said Germany's Agrar industry association.

Therefore, if gas becomes more expensive, fertiliser prices automatically rise. But if farmers use less fertiliser, crop yields suffer as a result.

-- BERNAMA-dpa