High fertilizer prices hit palm oil producers in Malaysia and Indonesia

A sharp rise in fertilizer prices is putting significant pressure on palm oil producers in Malaysia and Indonesia. Due to higher raw material costs and supply disruptions, fertilizer producers and suppliers are revising their prices, while some companies have already suspended the acceptance of new orders.

The crisis has been triggered by the escalation of the Middle East conflict and the effective blockage of the Strait of Hormuz, which has disrupted supplies of oil and gas—key inputs for fertilizer production. As a result, raw material prices are surging, adding further financial strain on the agricultural sector.

Market participants say that prices for some components have jumped by 100–150% in just the past two weeks. Under such conditions, fertilizer producers are being forced to temporarily halt sales or refuse new orders until price levels stabilize.

The situation is particularly critical for palm oil plantations, where fertilizers can account for up to 60% of total production costs. Rising agrochemical prices are directly squeezing margins and forcing companies to cut expenses or look for alternative solutions.

Farmers and producers are already beginning to partially switch to organic fertilizers or combine them with mineral ones to manage costs. However, experts warn that if the conflict drags on, pressure on the sector will intensify, potentially impacting global vegetable oil prices.

Tags: palm oil, fertilizers