The consequences of the war in the Middle East are becoming increasingly evident throughout the horticulture chain. Rising energy prices, more expensive raw materials, and higher logistics costs are forcing suppliers worldwide to increase their prices. Growers looking ahead to the coming winter and the 2027 season face difficult decisions: order inputs in advance, wait for the situation to stabilize, or risk potential further price increases. Globally, these rising costs are expected to contribute to higher inflation.
Energy prices
A direct consequence of the war in the Middle East is the rise in energy and fuel prices, although natural gas prices have not yet reached the peak levels seen in 2022, when the war in Ukraine began. The increasing gas price also affects electricity costs, both for growers with and without combined heat and power (CHP) systems, as well as the availability of CO₂. In addition, horticulture is facing—and will continue to face—many indirect consequences from the situation and from higher energy costs.
Plastics
The rising oil price directly impacts transport costs across the entire chain, from supply to distribution. Indirectly, it also affects the production of many horticultural inputs. Oil is a key raw material for plastics, which are widely used in horticulture, for example in trays, films, and pots. Rising oil prices therefore directly increase the cost structure for both growers and suppliers. In addition, labels, packaging, and printed materials also become more expensive due to higher oil prices. An additional factor is the shortage of recyclable plastics. Suppliers are being forced to raise their prices or switch to daily pricing.
Fertilizers
The fertilizer market is also affected, although fertilizers represent a relatively small part of production costs. Fertilizer producers face higher costs for energy, raw materials, and logistics, which results in price increases for growers. In addition, the price of sulfuric acid, which is needed for fertilizer production, is rising sharply. The war in Ukraine, combined with ongoing export restrictions from Russia and China, makes the situation even more challenging.
Coco substrates
The substrate market, which is already under pressure this year, is also feeling the consequences of the war. While India has decreased the petrol duties to 3 rupees ($0.032) and removed diesel duties, the situation in Sri Lanka is completely different. Being one of the main producers of coconut substrates, is experiencing fuel and energy shortages, as the country relies almost entirely on imports for both. The government has significantly increased fuel prices to cover import costs and is aiming to reduce consumption as much as possible. Measures include a four-day workweek, fuel distribution via QR codes, and even discussions of possible lockdown measures. Energy prices have also increased. Whether substrate production will be directly affected is not yet clear, but higher costs for suppliers are expected.
Transport rates and delays
With global fuel prices on the rise, transport costs are increasingly impacting both the supply of horticultural inputs and post-harvest logistics. Belgian transporters, for example, have raised the alarm. Isabelle De Maegt of the Federation of Belgian Hauliers explained, "We are very concerned. The various diesel price increases this month are having a major negative impact on transport costs, which have risen by more than 6%. There is no option but to pass this increase on to customers. Hauliers simply cannot absorb these costs themselves, as the average profit margin in the transport sector is around 2%." But also other players act upon the rising prices: French shipping and logistics company CMA CGM has revised its Emergency Fuel Surcharge (EFS) effective March 27, 2026, citing higher fuel prices linked to geopolitical developments in the Near and Middle East.
Investment decisions
Global greenhouse horticulture continues to develop and has good long-term prospects, but recent years have also brought major challenges. These include the loss of capital in North America due to the failure of several large vertical farms and some greenhouse companies. Worldwide, the sector was also affected by the ToBRFV tomato virus. This year, several suppliers have cautiously reported positive developments, but geopolitics threatens to interfere. Global uncertainty is causing construction costs (glass, steel) to rise, and the instability does not provide a solid foundation for investments, delaying the final approval of several large projects worldwide. Additionally, fears of a new wave of inflation are pushing interest rates higher.
