Conflict raises shipping costs and delivery times; urea prices climb on global market
The escalation of the war in the Middle East, following Iran’s attack by the United States and Israel on Saturday, has already forced changes to shipping routes for agricultural cargo in the region and prompted maritime transport companies to suspend container operations in the Strait of Hormuz. Carriers have also announced war-risk surcharges and restrictions on refrigerated cargo bookings.
The conflict has also rattled the international fertilizer market, as Iran is a key global supplier of urea.
Brazilian poultry exporters are assessing alternative routes to continue shipments to the Middle East, which accounts for 25% of Brazilian chicken exports. According to Ricardo Santin, president of the Brazilian Animal Protein Association (ABPA), cargo that previously transited through Hormuz and the Suez Canal will now be rerouted via the Cape of Good Hope, at the southern tip of Africa.
“Higher costs and longer delivery times are already expected,” Santin told Valor. He said alternative routes via Turkey and other ports, such as Salalah in Oman or through Saudi Arabia, are also under consideration.
According to the executive, shipments nearing their destinations have been diverted to other ports to await further developments in the conflict and the reconfiguration of maritime logistics routes. “Companies are concerned, as the Middle East is one of Brazil’s largest markets,” he said.
The suspension of container operations in the region is also set to drive up logistics costs. Maersk said on Monday it had suspended the acceptance of dangerous, special, and refrigerated cargo to and from the United Arab Emirates, Oman, Iraq, Kuwait, Qatar, Bahrain, and Saudi Arabia until further notice. “We are taking proactive measures to protect our people, safety, safeguard cargo integrity, and maintain the stability of our network,” the company said in a statement.
On Sunday, the company had already announced it was suspending all vessel transits through the Strait of Hormuz until further notice. “As a result, services calling at ports in the Arabian Gulf may face delays, rerouting or schedule adjustments,” it said.
Hapag-Lloyd, in turn, announced it has begun charging a War Risk Surcharge (WRS) on “cargo to and from the Upper Gulf, the Arabian Gulf and the Persian Gulf, or via the Persian Gulf,” due to the conflict. The additional charge is $1,500 per TEU for standard containers and $3,500 per refrigerated and special equipment containers.
The war is also expected to affect Brazilian agriculture’s production costs, as the country imports urea, a nitrogen fertilizer used in crops such as corn and wheat, from Iran. On Sunday, international prices for the input had already risen, according to consultancy StoneX. In Egypt, prices were approaching $540 per tonne—a week earlier they had been just under $490 per tonne.
According to Tomás Pernías, market intelligence analyst at StoneX, the market is still trying to assess the situation. “Immediately after the conflict began, urea suppliers in the Middle East withdrew their offers, awaiting greater clarity on pricing,” he said.
Tension in the fertilizer market stems from the Middle East’s central role in global production. Pernías noted that countries in the region account for about 40% of global urea exports, 28% of ammonia exports, and 29% of DAP (diammonium phosphate) exports.
Urea is the main agricultural product Iran exports to Brazil. In 2025, shipments totaled 184,700 tonnes.
Although Iran is the leading buyer of Brazilian corn—purchasing 9 million tonnes last year, or 23% of total exports—Brazil is unlikely to face difficulties redirecting shipments to other destinations if the Persian country is unable to make new purchases, said Glauber Silveira, executive director of the Brazilian Corn Producers Association (Abramilho).
“It’s hard to say how large the impact [on exports] will be with this situation in Iran. It will probably decline, since it is our main customer. However, Brazilian corn is in strong demand. In the past, China has already replaced Iran as the top importer. Even if it buys nothing, which is unlikely, there will always be some demand, such as from ethanol plants,” he said.
In his view, the greater concern lies with fertilizers, particularly urea. “Whenever there are conflicts, we become very apprehensive, because we are a country heavily dependent on exports, but also reliant on fertilizers, most of which are imported,” he added.
*By Cleyton Vilarino, Cassiano Ribeiro, Nayara Figueiredo, Danton Boatini Júnior and Paulo Santos, Globo Rural — São Paulo and Campina Grande
Source: Valor International
https://valorinternational.globo.com/