Mideast conflict is latest threat to global fertiliser supplies
Tired of too many ads?
Remove Ads
Tired of too many ads?
Remove Ads
Recent tensions in the Middle East are the latest reminder of the risks to crucial fertiliser supplies from the embattled region.Almost half of the world's shipments of urea, a nitrogen-based fertiliser relied on by farmers to grow grains and other key crops, come from the Mideast, Rabobank senior analyst Samuel Taylor said in a report this week. The latest escalation of violence between Israel and Iran had raised fears over a possible closure of the Strait of Hormuz, a critical export channel.While such a move isn't likely at this point, 'we can't take for granted just how concentrated some of these production and supply chains are,' Taylor said in an interview. 'We seem to be getting these reminders on a yearly basis.'The last big geopolitical shock to the price and availability of crop nutrients — the start of the Ukraine-Russia war in 2022 — was followed by runaway food inflation and a severe strain on farmers. Fertiliser markets over the last five years have undergone extreme price swings due to supply-chain shocks from the global pandemic and a surge in European prices of natural gas, a main input for most nitrogen fertilisers.Major agriculture producers Brazil and India are especially dependent on global markets for fertiliser. Brazil, which produces two corn harvests a year, imports more than 90% of its needed urea. Mideast tensions have sent prices of urea up this week in the South American nation, according to Bloomberg Intelligence analysts.In the US, the current season's top fertiliser application times have passed, though growers in just a few months will be turning to fall fertiliser applications for the next season.'For US farmers, don't expect a reversion down in pricing,' Taylor said. 'You're going to face cost price inflation into next year.'
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
&w=3840&q=100)
Business Standard
4 minutes ago
- Business Standard
Explained: What is the new 15% US-EU tariff deal and what does it cover?
US President Donald Trump and European Commission President Ursula von der Leyen on Sunday, July 27, announced a wide-ranging trade agreement that imposes a 15 per cent tariff on most European imports into the US. The deal, which was finalised during a brief meeting at Trump's Turnberry golf resort in Scotland, averted the looming threat of a 30 per cent tariff that was set to take effect on August 1. While the headline tariff rate is fixed at 15 per cent, many of the agreement's finer details are still unclear. The deal includes zero tariffs on select 'strategic goods' such as aircraft and aircraft parts, certain chemicals, semiconductor equipment, some agricultural products, and critical raw materials. However, pharmaceuticals, steel, and some farm goods remain outside the scope of this agreement. What is not included in the deal? While the agreement removes immediate tariff threats, several issues remain unresolved. Trump confirmed that the existing 50 per cent US tariff on imported steel will stay in place. Talks will continue on setting steel import quotas and reducing overcapacity in the global market. Pharmaceuticals were not included in this agreement. Von der Leyen clarified that those discussions are ongoing, separate from Sunday's deal. Tariffs on some EU agricultural products also remain unchanged, but with no clear indication of which items are excluded. What impact will the agreement have? The 15 per cent tariff is a significant increase from the pre-Trump average US tariff of about 1 per cent on European goods and above the 10 per cent baseline tariff applied during negotiations. For European exporters, the impact could be considerable as many companies will face the difficult choice of either passing the cost on to US consumers or absorbing losses. The earlier 10 per cent tariff was already enough to prompt the European Commission to slash its growth forecast from 1.3 per cent to 0.9 per cent. Now, with 15 per cent, German industry leaders warn of 'immense negative effects' on export-reliant sectors. Von der Leyen defended the deal, calling it 'the best we could do' and noting that it secures continued access to the US market and brings a degree of stability. How are different sectors reacting, especially carmakers? The car industry, which was gearing for a 30 per cent tariff, sees the 15 per cent rate as a relief. Von der Leyen pointed out that the new rate is significantly lower than the current 27.5 per cent tariff on cars from all countries — which includes Trump's 25 per cent tariff and the pre-existing 2.5 per cent US auto tariff. Still, European automakers remain under pressure. Volkswagen revealed it had already lost $1.5 billion in profits in the first half of the year due to higher US tariffs. Mercedes-Benz, which produces a significant share of its US-sold vehicles in Alabama, said price hikes are likely for future model years. What were the key issues dividing the two sides? Before Trump's presidency, US-EU tariffs were relatively low. According to the Brussels-based Bruegel think tank, the US averaged a 1.47 per cent tariff on European goods, while the EU imposed 1.35 per cent on American products, Associated Press reported. Trump frequently criticised the $235 billion US merchandise trade deficit with the EU, calling the European market unfair — particularly in the automotive sector. However, the EU argues that the US enjoys a substantial surplus in services like cloud computing, travel, and financial services, which helps offset the imbalance. Despite Trump's stance that the EU 'was formed to screw the United States', both sides have recognised the need to preserve their trading relationship. With $2 trillion in annual commerce, the US and EU form the world's largest bilateral trading bloc. How did the deal come together? The last-minute breakthrough came just days before the US deadline to impose new tariffs. Trump and von der Leyen held brief talks at Trump's golf resort in Scotland, joined by top EU trade officials. Commerce Secretary Howard Lutnick said the August 1 deadline was firm. 'No extensions, no more grace periods,' he said. Yet he said that Trump remained open to future dialogue. The EU had prepared its own list of retaliatory tariffs targeting hundreds of US goods, including beef, auto parts, beer, and even Boeing aircraft. Without a deal, everything from French cheese to German electronics could have become more expensive for American consumers. What are the concerns going forward? While the agreement avoided an immediate trade war, analysts caution that the deal remains vague in parts. 'There is nothing on paper, yet,' said ING's global chief of macro Carsten Brzeski. He warned that the lack of formal documentation makes enforcement and interpretation difficult. German Chancellor Friedrich Merz praised the outcome for preserving 'core interests' but expressed disappointment that deeper tariff relief wasn't achieved. (With agency inputs)
&w=3840&q=100)
First Post
4 minutes ago
- First Post
$750 bn of energy, $600 bn investment: 5 top things about Trump's EU deal
The US-EU trade agreement sets a 15 per cent tariff on most EU goods entering the US, replacing a previously threatened 30 per cent rate. Here are the five key takeaways read more US President Donald Trump (R) shakes hands with European Commission President Ursula von der Leyen (L) after agreeing on a trade deal between the two economies following their meeting, in Turnberry south west Scotland on July 27, 2025. Source: AFP The United States and the European Union on Sunday (July 27) struck a major trade agreement, averting a looming transatlantic trade war just days before an August 1 deadline. Announced by President Donald Trump and European Commission President Ursula von der Leyen at Trump's Turnberry golf resort in Scotland, the deal sets a 15 per cent tariff on most EU goods entering the US, replacing a previously threatened 30 per cent rate. STORY CONTINUES BELOW THIS AD 'It was a very interesting negotiation. I think it's going to be great for both parties,' Trump said, while von der Leyen emphasised, 'It will bring stability. It will bring predictability. That's very important for our businesses on both sides of the Atlantic.' Here are the five key takeaways from this landmark agreement. EU to purchase $750 billion in US energy A cornerstone of the deal is the EU's commitment to buy $750 billion worth of US energy over three years, aligning with the bloc's strategic shift away from Russian energy supplies. Von der Leyen confirmed the EU will purchase $250 billion annually in liquified natural gas, oil, and nuclear fuels during Trump's term. This move supports the EU's energy diversification goals, reducing reliance on Russia amid geopolitical tensions. Trump described the deal as 'a good deal for everybody,' noting its potential to boost US energy exports while providing the EU with stable, non-Russian energy sources. $600 billion EU investment in the US economy The EU has pledged an additional $600 billion in investments into the US economy, though specifics on sectors and timelines remain unclear. Trump claimed this would open 'all of the European countries, which I think I could say were essentially closed,' despite the EU already importing over $400 billion in US goods annually, including pharmaceuticals, autos, and aircraft parts. However, analysts caution that similar investment clauses in the US-Japan deal faced pushback, with Japanese officials denying claims that 90% of profits would remain in the US. EU to procure 'vast amounts' of US military equipment In a significant shift, the EU agreed to purchase 'a vast amount of military equipment' from US defence firms, moving away from its traditional focus on indigenous defence production. Trump highlighted this as a key component of the deal, though no specific dollar amount was disclosed. This commitment could benefit American defence companies, but it may spark debate within the EU, where leaders have prioritised building local defence capabilities. STORY CONTINUES BELOW THIS AD General tariff reduced to 15%, averting trade war The deal establishes a 15 per cent tariff on most EU goods entering the US, including automobiles, pharmaceuticals, and semiconductors, down from a threatened 30 per cent rate. This reduction averts a potential trade war that could have disrupted the $975 billion in goods exchanged between the US and EU in 2024, according to US Commerce Department data. The 15 per cent rate, while higher than the pre-Trump average of 1.2 per cent, offers relief to EU exporters and US consumers facing higher prices for goods like French cosmetics and German cars. The agreement also includes zero tariffs on select goods, such as aircraft, plane parts, certain chemicals, generic drugs, and some agricultural products. Steel and aluminium tariffs remain at 50% Despite the broader tariff reduction, the Trump administration maintained a 50 per cent tariff on EU steel and aluminium imports. Von der Leyen suggested further negotiations might address these rates, but Trump insisted, 'Steel is staying the way it is. That's a worldwide thing.' This decision continues to challenge European steel exporters and could increase costs for US industries reliant on these materials.
New Indian Express
31 minutes ago
- New Indian Express
US-EU trade deal wards off further escalation but will raise costs for companies and consumers
FRANKFURT: President Donald Trump and European Commission President Ursula von der Leyen have announced a sweeping trade deal that imposes 15% tariffs on most European goods, warding off Trump's threat of a 30% rate if no deal had been reached by Aug. 1. The tariffs, or import taxes, paid when Americans buy European products could raise prices for U.S. consumers and dent profits for European companies and their partners who bring goods into the country. Here are some things to know about the trade deal between the United States and the European Union: Many details remain to be decided Trump and von der Leyen's announcement, made during Trump's visit to one of his golf courses in Scotland, leaves many details to be filled in. The headline figure is a 15% tariff rate on 'the vast majority' of European goods brought into the U.S., including cars, computer chips and pharmaceuticals. It's lower than the 20% Trump initially proposed, and lower than his threats of 50% and then 30%. Von der Leyen said the two sides agreed on zero tariffs on both sides for a range of 'strategic' goods: Aircraft and aircraft parts, certain chemicals, semiconductor equipment, certain agricultural products, and some natural resources and critical raw materials. Specifics were lacking. She said the two sides 'would keep working' to add more products to the list. Additionally, the EU side would purchase what Trump said was $750 billion (638 billion euros) worth of natural gas, oil and nuclear fuel to replace Russian energy supplies, and Europeans would invest an additional $600 billion (511 billion euros) in the U.S. 50% U.S. tariff on steel stays and others might, too Trump said the 50% U.S. tariff on imported steel would remain; von der Leyen said the two sides agreed to further negotiations to fight a global steel glut, reduce tariffs and establish import quotas — that is, set amounts that can be imported, often at a lower rate. Trump said pharmaceuticals were not included in the deal. Von der Leyen said the pharmaceuticals issue was 'on a separate sheet of paper' from Sunday's deal. Where the $600 billion for additional investment would come from was not specified. And von der Leyen said that when it came to farm products, the EU side made clear that 'there were tariffs that could not be lowered,' without specifying which products.
