Indonesian Deputy Minister of Agriculture, Sudariono, disclosed that several countries are seeking to import fertilizers from Indonesia as a result of escalating geopolitical crises in the Middle East, which have disrupted global urea supplies. He explained that these countries are willing to pay any price to obtain these vital materials.
Sudariono made these remarks during the opening of the 2026 Asian Fertilizer Conference in Nusa Dua, Bali, where he noted that six countries, including India, Brazil, Australia, and the Philippines, have expressed interest in importing Indonesian fertilizers.
Event Details
Global trade has been significantly affected by conflicts in the Middle East, particularly in the Strait of Hormuz, which is a vital point through which approximately 30% of global fertilizer supplies pass. This has led to a substantial increase in fertilizer prices, with urea prices reaching $690 per ton, up from $350 to $380 at the beginning of 2026.
Sudariono confirmed that Indonesia has the capacity to be a major and stable source of fertilizers amid these crises, as the government ensures that local market needs for fertilizers are met. He pointed out that Indonesia's fertilizer production ranges between 14.5 and 15 million tons annually.
Background & Context
Historically, Indonesia has been one of the largest fertilizer producers in the world, playing a vital role in meeting local and global agricultural needs. With the increasing geopolitical crises, the demand for Indonesian fertilizers has become more urgent, reflecting the importance of this sector in the Indonesian economy.
PT Pupuk Indonesia, a state-owned company, is one of the largest fertilizer producers in the country, producing approximately 9.4 million tons of urea annually, with local needs estimated at around 7 million tons. The company also exports between 1.5 to 2 million tons annually to markets such as the Philippines, the United States, and South Korea.
Impact & Consequences
The repercussions of these geopolitical crises extend beyond their impact on fertilizer prices; they also affect global food security. With the rising demand for fertilizers, importing countries may face challenges in securing adequate supplies for their farms, potentially leading to increased food prices.
Moreover, Indonesia, by enhancing its position as a major fertilizer supplier, may open new avenues for trade cooperation with other countries, thereby bolstering its economic stability amid global crises.
Regional Significance
In the Arab region, fertilizers are essential components in agriculture, with many countries relying on imports to meet their needs. Therefore, the increased demand for Indonesian fertilizers could positively impact food security in Arab countries, especially given the economic and political challenges they face.
In conclusion, this development represents an opportunity for Indonesia to strengthen its role in the global fertilizer market, which could contribute to improving trade relations with other countries and enhance its economic stability amid increasing geopolitical crises.