KUALA LUMPUR (June 11): SD Guthrie Bhd (KL:SDG) on Thursday flagged that some fertiliser suppliers have sought to raise prices despite locked-in contracts amid the ongoing Iran war.
The world’s largest palm oil producer by acreage has secured fertiliser prices for the whole year but a few suppliers are negotiating to revisit their prices, which may lead to a 5%-10% increase in total production costs, according to group chief financial officer Shahrizal Suhainy.
“We are in discussions with them, but we do not expect a significant impact,” he told reporters after SD Guthrie’s annual general meeting on Thursday. “Overall, the impact is manageable.”
SD Guthrie sources key fertilisers such as urea and ammonium chloride from China, Belarus, Canada and Egypt. Costs of freight and logistics, however, have been affected by the on-and-off war between the US and Iran now protracted well into the fourth month.
Iran has announced closure of the Strait of Hormuz critical for the flow of global goods ranging from oil to fertilisers in response to the latest US strikes.
SD Guthrie may adjust fertiliser usage if the conflict persists, president and group chief executive officer Mohd Haris Mohd Arshad said at the same news conference, noting that applications can be adjusted without an immediate impact on yields.
In estates being replanted, fertiliser application may be halted for extended periods without causing an immediate decline in output, he said.
“But even if there is no fertiliser supplied for a year, that does not mean the end for producers like us,” Mohd Haris said. “We have seen operations where fertiliser is not applied for several years, typically in replanting areas.”
SD Guthrie replants about 4% of its planted area annually to maintain a balanced age profile of its trees, according to its annual report. In 2025, the group spent RM971 million on replanting, accounting for 47% of its total capital expenditure of RM2.06 billion.