Rising fertilizer and fuel costs are likely to translate into higher food prices for consumers. At the same time, competition from producers such as Ukraine and Brazil, which have traditionally been strongly present in the Persian Gulf region, may increase. The duration of the conflict will be the decisive factor in determining the scale of its impact.
At this stage, the consequences of the attack on Iran for the food production sector cannot yet be fully assessed. Much will depend on how long the military operations last and how they affect the capacity of maritime trade routes. However, several areas where the impact could be significant can already be identified. These include access to export markets, shifts in global food trade flows, changes in fertilizer prices, and fluctuations in oil and fuel costs. In addition, global uncertainty is likely to increase further. The following analysis focuses primarily on the Polish perspective.
Limited Direct Impact on Polish Food Exports
The region directly affected by the military actions extends beyond Iran itself and includes countries that could face disruptions in maritime supply routes. The conflict zone therefore encompasses Saudi Arabia, the United Arab Emirates, Bahrain, Iraq, Kuwait, Lebanon, Oman, Qatar, and Yemen, in addition to Iran. Israel is excluded from this group, as the probability of maritime supply disruptions to that country is considered relatively low.
From the perspective of Polish food exports, these markets are not among the most significant. Therefore, even a temporary suspension of trade with them would have only a limited impact on the overall condition of Polish food producers, although for some individual companies the consequences could be more noticeable.
In 2024, the total value of Polish food exports to these countries amounted to less than €700 million, representing just 1.5 percent of Poland’s approximately €48 billion agri-food export sector.
Within this group of countries, the largest market was Saudi Arabia, which accounted for up to 40 percent of Poland’s food exports to the region in recent years. This was followed by the United Arab Emirates (around 20 percent) and Iraq (more than 10 percent). Iran itself represented only about 2 percent of Polish agri-food exports to this group of markets, equivalent to roughly €13 million in 2024.
Key Exported Products
The largest product categories exported from Poland to these markets included:
- baked goods – approximately €147 million in 2024,
- cheese – around €80 million,
- poultry meat – about €54 million,
- sweets – approximately €38 million,
- chocolate – around €35 million,
- sugar – roughly €33 million.
Among these categories, the markets in the conflict zone accounted for the largest share of Poland’s total exports in cheese (7 percent), followed by sweets, sugar, and baked goods (around 5 percent each). In the case of poultry meat, the share was slightly above 1 percent.
Possible Trade Flow Shifts
A potentially more significant impact could arise from changes in global trade flows involving other producers.
For example, in 2024 Saudi Arabia was the second-largest export market for Ukrainian poultry. Ukraine also shipped significant quantities of poultry to Iraq and the United Arab Emirates, and to a lesser extent to Oman and Kuwait. Ukrainian grain and vegetable oils were exported to Lebanon, Iraq, and Saudi Arabia.
If Ukrainian exporters are unable to transport goods to these markets due to disruptions in maritime trade, surpluses could be redirected toward Europe, which may negatively affect the sales opportunities of Polish producers.
Brazil also holds a strong position in the region. In 2024, it exported approximately $1.5 billion worth of poultry to countries in the conflict zone, mainly Saudi Arabia, Iraq, and Kuwait.
Fertilizer Prices and Production Costs
Another important factor is the rise in hydrocarbon prices and potential supply disruptions, which directly affect fertilizer production and availability. Fertilizers are among the most significant cost components in crop production.
It is estimated that 25–30 percent of global trade in nitrogen fertilizers passes through the Strait of Hormuz. Any disruption to this flow would quickly affect market prices.
Following drone attacks, QatarEnergy, which exported 5.4 million tons of urea last year—around 10 percent of global seaborne exports—temporarily suspended the production of sulfur, ammonia, and urea. Other producers in the region are also considering slowing down or temporarily halting fertilizer production.
In Poland, Grupa Azoty announced on March 2 that it was withdrawing its price lists for nitrogen fertilizers and suspending order intake. On March 5, the company announced that it would resume accepting orders under current market conditions.
Farmers typically purchase fertilizers gradually over time, which means that the increase in prices will not accumulate at a single moment for most producers. Moreover, reducing fertilization for one season after years of standard farming practices is unlikely to cause a dramatic drop in yields. The full effects would only become visible in subsequent growing seasons.
Rising Oil Prices and Their Impact
Another consequence of reduced oil supply on global markets is higher fuel prices, which directly increase agricultural production costs, particularly in field crop farming. Fuel prices also affect transport and logistics costs, ultimately influencing the prices consumers pay in stores.
The attack on Iran has already caused significant volatility in oil markets. On March 9, Brent crude oil prices approached $120 per barrel, before falling back to around $90 later the same day.
Markets tend to react quickly to political statements and signals, which remain highly dynamic in the context of the war involving Iran. Global prices of grains and vegetable oils are positively correlated with oil prices, meaning fluctuations in the energy market have a direct impact on agricultural commodity prices.
For Polish farmers, these developments affect the final prices they receive for their crops.
So far, global agricultural commodity markets have reacted moderately to the attack on Iran. Prices have increased by about 10 percent for wheat and slightly less than 5 percent for rapeseed as of March 9. These changes are noticeable but still far from the dramatic price shock observed after Russia’s invasion of Ukraine in 2022.
Risks to Energy Infrastructure
A far more serious threat than short-term price fluctuations would be damage to infrastructure responsible for hydrocarbon trade. The first days of the conflict have already shown that such facilities can become targets of attacks.
If key infrastructure were damaged, reconstruction could take years, particularly if the process takes place under the continued risk of further attacks. Such a scenario could push energy prices to significantly higher levels for an extended period, with wide-ranging consequences for global economies.
A New Era of Global Uncertainty
The attack on Iran represents another event contributing to what many analysts describe as an era of growing global uncertainty. Military actions have affected the Strait of Hormuz, one of the most critical chokepoints for global trade.
This time, the disruption is not the result of an accident or technical failure but rather a direct consequence of political decisions by global leaders.
In recent years, disruptions to major global logistics routes—such as the 2021 blockage of the Suez Canal by the Ever Given container ship—were largely accidental events. The current situation, however, stems directly from strategic decisions made by political leaders of countries crucial to global stability.
Duration of the Conflict Will Be Crucial
At this point, the actions and communications of global leaders will determine how the situation develops.
For the Polish food production sector, a short conflict lasting no more than a few weeks would likely have limited impact and would not fundamentally change the sector’s strategic position.
However, the longer the conflict lasts, the more challenging the situation may become. Rising production and operational costs will inevitably lead to higher consumer prices, forcing households to adjust their spending habits.
In the medium term, an even more significant consequence for Poland’s food sector could be increased competition from producers that previously focused on markets in the conflict region, particularly Ukraine and Brazil.
Author:
Grzegorz Kozieja – member of the Polish Economic Society (TEP), Director of the Food & Agro Analysis and Sector Specialization Department at BNP Paribas Bank Polska.
