New Study: Global Fertilizer Market Stability Facing Long Road

Global fertilizer markets ended the first quarter of 2026 under severe strain and now face tight availability, sharply higher prices, and elevated volatility across major nutrients, a new study published by RaboResearch shows. Concern is growing that 2027 may see reduced fertilizer application rates due to high prices, ultimately resulting in reduced crop yields.

Escalating geopolitical disruption in the Middle East and the effective closure of the Strait of Hormuz have removed a substantial volume of fertilizers and critical inputs from global trade, triggering an abrupt supply shock that cannot be quickly replaced.

Fertilizer affordability has deteriorated rapidly. Prices for nitrogen and phosphates have risen far faster than agricultural commodity prices, compressing farm margins and accelerating affordability stress.

“Our fertilizer affordability index has moved decisively into negative territory and is expected to remain constrained throughout 2026, with only limited recovery in the second half of the year,” notes Bruno Fonseca, Senior Analyst – Farm Inputs with RaboResearch. “This raises the risk of widespread demand destruction as farmers reduce application rates, delay purchases, or shift crop choices.”

Market Normalization Will Be Slow, Even If Tensions Ease

Nitrogen markets are the most exposed and forecast to see one of the steepest declines in demand in 2026. Phosphate markets are similarly pressured. Supply disruptions and sharply higher input costs have reinforced structural tightness, with elevated prices expected to persist into 2027. While potash remains comparatively more balanced, indirect effects from weak affordability in other nutrients are expected to weigh modestly on demand in 2026.

Furthermore, alternative sourcing options are shrinking as countries introduce stronger protectionist measures.

“Overall, the fertilizer market faces a prolonged period of tight supply, weak affordability, and heightened price risk. Even if geopolitical tensions ease, normalization will be slow,” Fonseca advises. “Demand destruction is becoming unavoidable: Farmers are expected to trim application volumes in the current season and likely the next crop cycle as well.”

For more, continue reading at rabobank.com.