The War in Iran Creates Risks for Ukrainian Corn and Sunflower Oil

The armed conflict in Iran may have the greatest impact on Ukraine’s export positions, particularly in the corn and sunflower oil markets, which account for a significant portion of the country’s foreign currency earnings — about $5 billion annually.

This is reported by AgroReview

The Impact of War on Agricultural Production Costs

Pavlo Martyshev, an analyst at the Food and Land Use Research Center of the Kyiv School of Economics, notes that the consequences of the war will primarily manifest in the rising costs of growing corn and sunflowers. Currently, expenses for fertilizers and fuel account for 25% to 30% of the total cost of these crops, and further increases in energy prices or nitrogen fertilizers could raise this figure to over one-third.

“We are taking a hit on the cost of corn and sunflowers primarily. Fertilizers and fuel make up about 25-30% of the cost of corn and sunflowers. That is approximately one-third of production expenses. If prices for energy sources and nitrogen fertilizers continue to rise, this share could exceed one-third of the total cost,” explained Martyshev.

The Situation in Global Markets and Prospects

Despite the escalating situation in the region, global grain prices remain relatively stable. This is due to the fact that Iran and its neighboring countries are not key grain producers in the global market, as well as high harvests worldwide. At the same time, the expert points out that Iran is a significant importer of corn, and the hostilities in the region are putting pressure on the prices of this crop.

Among the main factors affecting the situation, the specialist highlights:

• high grain harvests worldwide;
• the non-critical nature of the conflict region for global grain production;
• possible reductions in corn imports from Iran.

According to the analyst, two opposing factors are simultaneously influencing the market: geopolitical risk is driving prices up, while decreased demand due to the potential exit of Iran as a corn importer is restraining price increases.

• Geopolitical risk — potential increase in agricultural product prices;
• Losses for individual importers — limiting demand for grain.