How has the Middle East conflict affected demand in the UK and globally?

Key points 

• Global and UK exports to the Middle East fell in March and April 2026 after the Strait of Hormuz closed
• Exports could be rerouting through safer ports, with lower volumes and uncertainty pushing prices up
• Some loss in demand potentially rerouted to established larger and more certain importers, like China and the USA

Overview

The effects of the Middle East conflict are wide and significant. The consequences for the supply of oil, LNG (liquefied natural gas) and, most importantly for agriculture, fertiliser are well documented. Far less has been said about the effect on demand, and what that means for the UK agricultural sector. 

The conflict began on 28 February 2026, when US and Israeli strikes against Iran prompted Iranian retaliation and the closure of the Strait of Hormuz to shipping from early March. Economic and logistical reactions take time to feed through, and shipping delays make the effects hard to separate from other confounding factors. Even so, a few overarching trends can be identified.

Dairy 

The Middle East imported £175 million of UK dairy products in 2025. Whilst this is only 3.7% of our dairy export volume, it accounts for 8% of our total export value of dairy, making it an important destination for higher value product. Total imports across the region have held broadly constant through the months affected by the conflict, but there are signs of rerouting between countries.  

UAE imports were down more than 50% in March and April against the December-to-February three-month average. Over the same window, Saudi Arabian imports grew sharply in April compared with the month before, again consistent with the rerouting of shipping toward safer ports. 

Iranian trade data is only available to January 2026, which limits what can be said directly. Iran is, however, a significant exporter of milk powders. If the conflict has disrupted Iranian supply, it could tighten global milk powder availability and add upward pressure to prices. 

Red meat 

The Middle East does not rival Europe as a destination for UK red meat exports, but it remains an important market. Sheep meat is an established UK export, though we see limited trade in other red meats. 

Kuwait is the Gulf's largest importer of UK sheep meat, taking 899 of the 1,300 tonnes sent to the Middle East in 2025. The volume sent to the region accounted for only 1% of total export volume and value. Between February and March 2026, Kuwaiti imports fell by 87%, from 69 tonnes to 9 tonnes. Much of this volume was displaced to Saudi Arabia, whose imports rose from zero to 33 tonnes over the same period. Total UK sheep meat volumes to the Middle East fell to 38 tonnes in April, down 80% compared with January. 

As volumes fell, value rose. Higher shipping and insurance costs lifted export prices, contributing to a 158% increase in value per kilogram in April compared with January 2026. At low volumes, individual shipments can distort the average price considerably, so these figures should be read with caution. 

This points to a possible rerouting effect, where trade continues but is redirected through safer passages. Kuwait sits inside the Strait of Hormuz, so its imports may now arrive through another country's port before being moved onward by safer logistics, such as road haulage. 

Middle East imports 

Monthly dairy imports to the Middle East averaged £459 million in 2025. In March 2026, import values fell 21% against the 2025 average to £361 million, 18% down on March last year.

Excluding the EU, New Zealand exports the highest volume and value of dairy products to the Middle East, averaging £97 million per month in 2025. 2026 volumes remain strong; however, March saw a low of £77 million when tensions were highest, accounting for the largest decrease in imports. While New Zealand dairy exports have grown on other established routes, such as China and Southeast Asia, it is hard to attribute this to the Middle East conflict alone, though it is reasonable to assume the conflict had some effect. 

Monthly sheep meat value to the Middle East averaged £94 million a month in 2025, averaging 20 thousand tonnes. In March, value was down 34% against the 2025 average and 46% down from February 2026, totalling £62 million. Volumes were down 43% against this average and 55% on the year. This reduction continued into April, when volumes recovered marginally to 14 thousand tonnes but remained below last year's averages.

Australia is the largest sheep meat exporter to the Middle East, accounting for over 60% of the region's imports. While its exports to Saudi Arabia and the UAE declined, the US and China saw some growth in their imports from Australia. This could be a sign of exports being rerouted to safer and more established shipping routes. 

The beef sector in the Middle East had been growing since Q3 2025, reaching £590 million in December 2025. This growth quickly reversed to £385 million in March and £370 million in April. While this is down from record months, it remains comparable to last year's Middle East beef imports. Brazil and India were the main contributors to the growth; however, Brazil eased its exports in both March and April, whereas India increased its exports immediately after the March hit. 

Global demand 

A persistent shock to energy prices raises the cost of producing agri-food. Because the effect is global, world prices rise across these products even as higher energy costs squeeze importers' purchasing power, leaving sellers committing more cash to produce while buyers struggle to meet inflated prices. 

Should these pressures persist, the implications could be lasting. Marginal farms may find production uneconomical and exit, tightening supply further, while those servicing higher credit costs have less to invest, weakening long-term growth even among profitable operations. Continued pressure on UK agricultural margins could be expected.

You can subscribe to receive Beef and Lamb market news straight to your inbox. Simply fill in your contact details on our online form.