The outbreak of war in the Middle East and the resulting sharp increases in gas prices are creating growing uncertainty in the fertilizer market. Farmers fear not only rising prices but also potential shortages of nitrogen fertilizers just before the start of spring fieldwork. Fertilizers can account for as much as 45–60 percent of crop production costs, meaning that any disruption in the market quickly affects the financial stability of agricultural farms.
“In the near future we can expect fertilizer prices to rise and possibly even face problems with their availability on the market. This is a direct consequence of the conflict in the Middle East and disruptions in the gas market. Over just the last few days, gas prices have increased by 75 percent. We are also seeing reactions from domestic fertilizer producers who have temporarily suspended accepting new orders for nitrogen fertilizers,” said Mateusz Stankiewicz, an expert at the Federation of Sectoral Agricultural Producers’ Associations, in a statement to the Newseria news agency.
On Tuesday, March 3, the Polish chemical company Grupa Azoty announced a temporary suspension of new orders for certain nitrogen fertilizers. The company explained that the decision was driven by the dynamic situation on the gas market and the high volatility of energy prices, which play a key role in fertilizer production costs. According to the company, accepting orders under previous terms in the face of such a drastic increase in costs would have led to negative financial consequences. The situation was further complicated by fertilizer producers outside Europe—including those in Egypt, Algeria, China, and the United States—who immediately increased fertilizer prices.
Two days later, on Thursday, Grupa Azoty announced that it would resume accepting orders. The company emphasized that “fertilizer production continues uninterrupted, operating at maximum production capacity. The available volume of fertilizers, together with stocks held by the authorized distribution network, is sufficient to secure both current and future needs of agricultural producers.”
The fertilizer market is closely linked to developments in the energy sector, as natural gas is the primary raw material used in fertilizer production. Gas is used to produce ammonia, which is the fundamental component of nitrogen fertilizers. When gas prices increase, production costs rise almost immediately, which is quickly reflected in fertilizer prices on the market. At the beginning of March, energy markets reacted strongly to escalating tensions in the Middle East, including reports of attacks on energy infrastructure and concerns about potential disruptions to shipments through the Strait of Hormuz—one of the world’s most important energy transport routes.
“With such a tight cost structure, where fertilizers account for between 45 and 60 percent of crop production expenses, any significant increase in fertilizer prices may destabilize the financial situation of many farms. This season is already difficult due to low prices for cereals and other agricultural commodities, putting many farms on the brink of bankruptcy,” Stankiewicz explained.
Spring is a critical period for the nitrogen fertilizer market. The first application of fertilizers usually takes place just before the start of intensive plant growth, depending on weather conditions. In Poland, this is particularly important for winter cereals, which cover more than four million hectares of farmland. For many crops, nitrogen fertilizers are a key factor determining yields. As a result, their availability in early spring plays a crucial role in the production of cereals and other field crops.
“Nitrogen fertilizers are needed right now, before vegetation starts, so that plants can develop stronger shoots and suppress weeds. Multi-component fertilizers are particularly important for crops that are sown in spring, such as maize, sunflower, and potatoes,” said Marian Sikora, chairman of the Council of the Federation of Sectoral Agricultural Producers’ Associations.
Poland’s Ministry of Agriculture has warned that any reduction in fertilizer availability during the preparation period for spring fieldwork could negatively affect agricultural production and the food market. The ministry is therefore closely monitoring fertilizer availability and prices across different regions of the country and has indicated that further measures may be taken if the situation worsens.
According to representatives of agricultural organizations, the stability of the fertilizer market will depend both on developments in energy markets and on decisions taken at national and European levels.
“We are appealing to domestic producers to show solidarity, especially at a time when the prices farmers receive for their products remain low and fertilizer purchase prices may rise sharply,” Stankiewicz said. “There will also likely be an appeal to the European Commission to take steps toward removing tariffs on fertilizers entering the European market—excluding those from Russia and Belarus—and to help stabilize the internal market.”
“We are already discussing the possibility of the European Commission helping to lower gas prices for nitrogen fertilizer plants so that they can maintain production and avoid further price increases for fertilizers, which are already very expensive compared with the prices farmers receive for cereals,” added Sikora.
Poland is one of the largest producers of mineral fertilizers in the European Union. Domestic chemical plants produce several million tons of fertilizers annually, most of which are nitrogen fertilizers used in the cultivation of cereals, rapeseed, and maize. According to European Commission data, 9.3 million tons of mineral fertilizers (nitrogen and phosphorus) were used in agricultural production across the EU in 2023.
The Ministry of Agriculture reiterated that any disruption in fertilizer availability during preparations for spring fieldwork could negatively affect agricultural output and food markets. For this reason, the ministry continues to monitor the market situation closely and has announced that it may introduce additional measures if conditions deteriorate.
