On The Land
27 July, 2025
Middle East conflict lifts urea prices
THE escalation of conflict in the Middle East over the past month has had a notable impact on urea markets, according to RaboReseach’s latest agribusiness newsletter.
The broader region, including Egypt, accounts for around 45% of global urea exports, and much of the trade depends on the Strait of Hormuz – a critical maritime chokepoint.
Iran’s parliamentary vote to close the Strait sparked market panic, but vessels have continued to pass through.
A more positive turn came with the US-brokered ceasefire between Israel and Iran. This eased market tensions, and urea prices have since pulled back from the highs seen earlier in the month – although still remain higher than pre-war levels, according to the newsletter.
“If the ceasefire holds, it’s likely prices will return to pre-conflict levels, with market focus shifting back to global supply and demand fundamentals,” it stated.
The war directly disrupted production in two major exporting countries: Iran (third-largest globally) and Egypt (fourth largest). Iran’s output was halted due to damage to gas fields, while Egypt’s supply was affected by Israel cutting off gas exports.
“Before the conflict intensified, global urea supply was already showing signs of recovery. China recently announced its return to the export market after an 18-month hiatus. While export volumes will be capped, the additional supply is welcome amid ongoing uncertainty,” RaboResearch stated.
Better news for the Australian cattle market which remained fairly balanced through June, with cattle prices generally flat to slightly rising.
In a reflection of the demand and supply points, heavy steer prices rose the most, supported by lower numbers through saleyards. Cow prices also lifted with ongoing demand from the US.
Meanwhile replacement heifers and steers saw the smallest rise, with producer demand for restockers not enough to push prices much higher. The national young cattle indictor rose 5% in the month, to AUc 380/kg.
Last year, July and August saw cattle prices across all categories rise – up 15%-40% between the beginning of July to the end of August. RaboResearch says that at the time, there was no significant change in season, change in saleyard or slaughter numbers.
“US import prices lifted slightly and there was an increase in export volumes to the US as a strong summer grilling demand supported increased US imports. A similar scenario could play out this year, given lower beef supplies in the US for their grilling season,” it stated.
“But there could be a few differences. The BOM is forecasting a greater than 50% chance of exceeding average rainfall for much of eastern and northern Australia over the next three months.
“At the same time, it is difficult to say if US demand is still as strong with some indicators suggesting the US economy is slowing. Given these conditions, we believe cattle prices will edge higher over the coming months, with the extent of the rise contingent on US demand for beef and on local seasonal conditions.”
National weekly cattle slaughter pushed to the highest point this year and the highest value since late 2019 at 153,442 head for the week ending 20 June. Volumes across all states were up on last year with year-to-date numbers up 11% nationally.
Export numbers up to 26 June were showing a continued trend of previous months, with volumes up approximately 15% on 2024.
Volumes to the US were up year-on-year, although down slightly on previous months, and volumes to South Korea were also up. Volumes to Japan, while down on last year’s volumes, were similar to 2023 volumes.
Australian live cattle export volumes were up 10% in May to 87,080 head with volumes to Indonesia up 24%.
