Amman, April 5 (Petra) -- The Arab Potash Company (APC) said during its participation in the Argus Fertilizer Asia 2026 conference in Indonesia that it is actively engaged in global discussions on the future of the industry, as its Chairman and CEO outlined major structural shifts reshaping international markets.
Chairman Shehadah Abu Hdaib told Petra that current global developments cannot be viewed as cyclical fluctuations or temporary crises but rather represent a fundamental transformation in the global economy. He said the fertilizer sector has assumed a strategic role beyond being an agricultural input, becoming a pillar of global food security, economic stability, and national security.
He noted that the Middle East has emerged as a central hub in global supply dynamics, exporting more than 60 million tonnes annually of fertilizers and related raw materials, around 45 million tonnes of which pass through the Strait of Hormuz, making it one of the most critical chokepoints in the global economy with a direct impact on market stability.
Abu Hdaib added that the region accounts for around 50% of global sulfur exports and more than 30% of urea exports, helping explain sharp price increases driven by what he described as a "geopolitical risk premium" embedded in global pricing structures. Prices, he said, are no longer shaped solely by supply and demand but are increasingly influenced by geopolitical uncertainty.
He said recent logistical challenges in global trade, including reduced efficiency of maritime routes and rising shipping and insurance costs, have reshaped trade flows and imposed a new operating reality on companies, extending shipping times, raising costs, and increasing risks, particularly in import-dependent markets.
Despite these challenges, Abu Hdaib said the company has maintained export continuity and steady supply flows to global markets by adopting a proactive approach focused on operational flexibility, diversifying logistics routes and strengthening risk management tools, reinforcing its position as a reliable supplier and strategic partner.
CEO Maen Nsour said regional developments have pushed global firms to rethink business models, shifting from traditional approaches centered on operational efficiency and cost reduction to more advanced models prioritizing flexibility, diversified supply chains and proactive risk management in an increasingly uncertain global environment.
Nsour said any disruption in the Strait of Hormuz, even if brief, could halt critical flows of raw materials such as sulfur, ammonia and urea, which are essential for fertilizer production.
He described the fertilizer sector as a cornerstone of the global economy due to its central role in agricultural and industrial value chains, warning that disruptions can trigger a cascading effect starting in energy markets, moving to fertilizers, then food prices, and ultimately inflation and economic growth.
He said fertilizer demand, particularly in Asia, is undergoing rapid shifts driven by demographic and economic factors, with Southeast Asia’s population exceeding 700 million, boosting food demand and, in turn, demand for agricultural inputs, especially high-efficiency fertilizers.
This growth, he added, has been accompanied by changing consumption patterns linked to rising incomes and purchasing power, increasing demand for higher-value crops and requiring more advanced fertilizers to enhance productivity.
He noted that rising fertilizer prices are beginning to affect farmer behavior, with some reducing usage rates or delaying purchases, adding complexity to the market. Climate change is also reshaping demand, as weather volatility pushes farmers towards more efficient and specialized fertilizers.
Nsour said fertilizer applications now extend beyond agriculture into key industries, including mining and chemicals, as well as emerging energy applications such as lithium iron phosphate batteries, reflecting a more diverse and complex global demand structure.
On strategy, he said the company has adopted an integrated approach to enhance operational resilience, including developing logistics infrastructure, diversifying export markets and studying the establishment of regional storage hubs to improve responsiveness to supply chain disruptions.
He added that the company reduced production costs by 5% in 2024 while investing in renewable energy projects with a capacity of 36 megawatts as part of efforts to enhance sustainability and reduce reliance on conventional energy sources. It has also diversified its product portfolio to nine products serving both agricultural and industrial uses.
On sustainability, Nsour said environmental, social and governance (ESG) standards have become a key determinant of competitiveness amid tightening global regulations, such as the European carbon border adjustment mechanism, which imposes strict emissions standards.
He said companies investing in green transformation will be better positioned to maintain market share, while others will face growing challenges, noting that APC benefits from a competitive advantage through its reliance on natural solar evaporation at the Dead Sea, one of the least energy-intensive production methods, reducing costs and carbon footprint.
Assessing regional crises, Nsour said the war in the Middle East has triggered a structural shock in global markets due to the concentration of production and exports in the region, embedding geopolitical risk into pricing and heightening market sensitivity to disruptions.
He added that importing countries are adjusting behavior by building strategic reserves, diversifying supply sources and reducing reliance on specific regions to strengthen supply security as part of national food security strategies.
He said APC is well positioned within these shifts due to its low-cost production model and geographic location, noting that potash is less dependent on the Strait of Hormuz compared with other products such as urea and sulfur, giving it greater ability to maintain supply stability and reduce risk.
Nsour said the next phase will require companies to adopt more flexible and innovative operating models focused on supply security, sustainability and risk management, adding that APC aims to turn global challenges into strategic opportunities and strengthen its role as a trusted partner in supporting global food security amid heightened economic uncertainty.
//Petra// AF
