The fertilizer supply chain is expected to remain volatile for most of this year, with phosphate prices projected to remain high into 2027, as growers around the world debate applications heading into their growing seasons, according to agri-finance company Rabobank’s Semiannual fertilizer outlook.
The U.S. and Israel’s war with Iran has quickly led to sharp increases in fertilizer prices, with nitrogen and phosphates being particularly impacted, while potash pricing has remained neutral, according to Rabobank. Approximately 0.8 million metric tons of fertilizers and precursors are estimated to be removed from the market each month if the Strait of Hormuz is closed.
The 12-month average affordability for all three fertilizers has reached the lowest point in 18 years, according to Rabobank. In the next six months, nitrogen and phosphate will experience upward price pressures, while potash will see “slightly upward” pressures. Rabobank expects some improvements in the back half of 2026 for potash.
In the U.S., conversations around reducing or eliminating countervailing duties (CVDs) to improve pricing are becoming more frequent, “but it’s unlikely to necessarily appease domestic pricing,” Samuel Taylor, senior analyst, U.S., said in a media briefing on the report.
“Traditionally, [CVDs] have caused phosphate prices in the U.S. market to trade at a significant premium to global prices. But given the global scarcity of phosphates, there’s actually an export arbitrage opportunity that has opened up in phosphates, where you can actually export phosphates from the U.S. market to Brazil and still garner a profit,” Taylor elaborated.
How fertilizer shocks are rippling across the world
The disruption to the fertilizer market is being felt globally. U.S. corn growers were largely spared the brunt of fertilizer price increases because they made allotments for this year, according to a recent National Corn Growers Association report.
However, Brazil is expected to reduce fertilizer imports. The country is expected to import 47.2 million metric tons of fertilizer this year, following a record-level of deliveries in 2025 with 49.1 million metric tons. Brazil imports nearly 90% of its fertilizers, with 70% of its urea arriving in the country between May and December.
“The phosphate prices in Brazil ... look really quite horrible for this year — CFR above $1,000 per ton. It’s not a very appealing situation for some of these growers,” Taylor elaborated.
Elsewhere, countries are feeling the impact of higher fertilizer prices in numerous ways, including ...
- China is self-sufficient in phosphate and nitrogen fertilizers due to less Middle East exposure risks and stabilized local prices. The fertilizer precursor sulfur is an exception. China sources most of its potash from Russia, Belarus, Canada, and Laos, which are not transported through the Strait of Hormuz.
- India, Pakistan, and Bangladesh face the sharpest disruptions, since the countries rely on the Middle East for their fertilizer. Additionally, India is one of the largest urea-deficient countries.
- Australia is heavily dependent on imports of urea and MAP, and Middle East granular urea prices are hovering around $915 AUD per metric ton, a 57% increase year-to-date. Despite a strong Australian dollar, farmer margins continue to compress, as grain prices remain challenged.
Countries like Mexico and Turkey are removing tariffs on fertilizers, and Europe could follow suit to provide relief on nitrogen fertilizer prices, explained Doriana Milenkova, senior analyst for Europe and Africa. The “U.S. was the first one, even before the conflict,” to reduce tariffs on fertilizers, she noted.
