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Crop & Chemical Dashboard: Middle East turmoil a new worry

The outlook for the 2026 Kharif cropping season is clouded by worries around a predicted strong El Nino and possible disruption in fertilizer supplies due to conflict in the Middle East. Higher prices of crude oil should lead to broad-based increases in prices of petrochemicals, although the impact on margins is unclear and dependent on product-specific supply-demand dynamics. Any impact on specialty chemical prices may follow only with a lag.

Fertilizer crunch, El Nino forecast are worries ahead of Kharif season

Crop price movements in the international markets were mixed last week: US soybean and wheat prices each climbed 8-9% mom, whereas coffee and rice dropped 14.3% and 5.8%, respectively. In India, prices were generally under pressure: soybean, paddy and wheat prices each fell 6-9% mom, while vegetables registered sharper falls, with onion down 20%, potato 14.6% and tomato 48%. India’s import prices of urea have jumped 20% in the past month amid supply constraints imposed by China, and the outbreak of war in the Middle East threatens to further increase India’s fertilizer import costs and perhaps affect availability ahead of the upcoming Kharif season. Forecasts for a strong El Nino this summer in India are an added worry for the upcoming cropping season.

Developments in the US-Iran conflict are a key monitorable

Prolonged unrest in the Middle East could not only push up input costs for Indian chemical companies but also impact export revenues for certain companies. Companies with the highest export exposure to the Middle East from our coverage universe are Aarti and SRF, each of whom derives a double-digit share of exports from the region. For January 2026, India’s exports of organic and inorganic chemicals declined 5.1% mom and 0.2% yoy, while imports rose 12.3% mom but fell 0.2% yoy. US chemical exports fell 2.2% mom in December 2025. On a yoy basis, US chemical exports were down 10.1%, while imports plunged 13.9%. US chemical production rose 0.6% mom but declined 0.3% yoy, while the chemical producer prices slipped for a third month by 0.6% in December 2025.

Comments on chemical price trends

Following sharp increases since October 2025, prices of battery chemicals corrected over the past month, with LiPF6 and electrolyte each down 10-12%, although they remain sharply higher yoy. Vinylene carbonate, too, shed 2.6% but remains higher by 182% yoy. In the agrochemical markets, prices of CTPR (chlorantraniliprole—important for Jubilant Ingrevia) jumped 16% mom following another accident at a Chinese supplier of intermediates for the product. In the fertilizer segment, ammonia and urea prices rose 11.1% and 20%, respectively. Among basic chemicals, prices of PVC rose by 7.5% in the past month ahead of China’s removal of export tax rebates, while benzene climbed 6.2% and acetone moved higher by 24.1%, leading to a 17.5% increase in phenol spreads. Fluorochemical prices were little changed last month.

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