Global Fertilizer Price Outlook: Raw Material Costs and International Market Trends

Raw Material Costs – Energy Core To Fertilizer Pricing

According to Agricultural Inputs News, on 28 April 2026, World Bank released latest Global Commodity Market Outlook report, which noted conflict in Middle East has triggered severe disruptions in energy supply chains. As natural gas and crude oil are core raw materials for fertilizer production, their skyrocketing prices have directly driven up cost of agricultural inputs. Global fertilizer prices projected to rise by 31% overall in 2026.

Recent analysis by Organisation for Economic Co-operation and Development OECD highlights how fertilizer price shocks can affect farm profits, input use, planting choices and agricultural output. According to World Bank 2026 commodity market analysis, its fertilizer price index increased by more than 12% in first quarter of 2026 compared with previous quarter. World Bank also projected fertilizer prices could rise by more than 30% over 2026, although outlook depends on conflict resolution.

Global fertilizer prices strengthened in H1 2026 as supply disruptions, energy costs and tight sulfur availability raised farm input bills. In May, World Bank projected global fertilizer price index could rise by more than 30% in 2026. Global fertilizer price index forecast to rise more than 30% while food commodity index about 2.5%, meaning input costs rising much faster than farm-gate prices.

Oxford Economics fertilizer price forecast for 2026 projects global prices could climb more than 30% this year, with urea rising even faster, as Strait of Hormuz shipping disruptions and geopolitical tension keep supply tight. Affordability measured by grains-to-fertilizer price ratio sits near historic lows, magnifying hit to yields and margins. Nitrogen and phosphate remain most exposed because they depend on global production hubs and shipping lanes.

International Market Trends – Tight Supply And High Prices

World Bank confirmed this week global fertilizer prices have risen 35% in first five months of 2026 compared to same period last year. Urea prices surged 53.7% in March to 725.6 dollars per metric ton, highest level in four years. Commodity Markets Outlook projects fertilizer prices will rise by average of 31% across full year, reaching worst affordability levels since 2022. DAP prices forecast to climb 6%, and MOP prices to increase 12%.

European Commission data shows urea prices jumped 55% since conflict began in late February. In Argentina, benchmark urea prices surged to around 1,000 dollars per tonne from 500 dollars before crisis. Food and Agriculture Organization of United Nations warned in March global fertilizer prices could average 15% to 20% higher in first half of 2026 if crisis continues, enough to materially alter crop economics in import-dependent regions.

High raw material costs also placing pressure on producer margins, with some manufacturers reducing output rather than accepting lower finished-product prices. That dynamic further tightens supply.

China prilled urea indicative 345 to 350 dollars PMT FOB netback August 2026, while Brazil MAP up to 850 dollars PMT CFR, showing regional spread. Urea traded at 502.50 dollars per tonne May 22, down 7.37% from previous day and more than 27% lower over past month according to Trading Economics data, illustrating volatility.

Fertilizer prices set to rise over 30% in 2026, World Bank warning appears in Commodity Markets Outlook released April 28. In March, urea reached 725.6 dollars per ton marking 53.7% jump from February and highest level in four years. It expects urea prices to average around 675 dollars per ton this year, close to 60% higher than in 2025.

Supply Disruptions And Production Challenges

Global fertilizer prices may remain elevated through 2028. CoBank believes conflict in Middle East, tight supply, and damaged production capacity could keep global fertilizer prices above pre-war levels through 2027-2028. According to new report from CoBank Knowledge Exchange, fertilizer markets expected to remain under pressure through 2028 as global supply disruptions and production challenges continue affecting nutrient availability. Ongoing uncertainty in international markets along with tight supplies of key raw materials expected to support higher prices for several more years.

Global fertilizer industry relies heavily on major exporting regions for products. When those regions face conflict, entire supply chain tightens. Liquefied petroleum gas shipments stall as Gulf exports collapse, Goldman Sachs identifies LPG as key shortage risk in Q2 2026. Naphtha vanishing from Asian markets, petrochemical plants shutting down because they cannot afford or obtain feedstock.

Sulfur prices surged more than 130% since early 2026, directly affecting phosphate production because sulfuric acid required to produce DAP and MAP from phosphate rock. Sulfur is byproduct of oil and gas refining. When oil supply falls by 5.2%, 5.5 million barrels per day in 2026 as projected, sulfur availability also falls, creating secondary tightness.

NDSU expects average urea prices to reach around 496 dollars per MT in 2027, while StoneX believes volatility may increase without necessarily keeping prices at exceptionally high levels for extended period. Argus forecasts global phosphate fertilizer consumption steady but supply constrained.

Regional Demand And Affordability Challenges

Farmers facing mounting supply risks as of October 2026, with industry analysts warning disruptions in global nitrogen, phosphate and sulfur markets could extend into spring 2027. Diammonium phosphate DAP prices have risen from about 700 dollars per ton early in 2026 to around 850 dollars per ton, while sulfur prices surged more than 130%.

India prepares to return to urea market as global fertiliser supply pressures intensify, with weekly update w/e 23.10.2026 noting supply pressures. India is world's largest urea importer, faces mounting costs due to subsidy burden.

Brazil MAP up to 850 dollars PMT CFR reflects strong demand from soybean and corn sectors, but affordability concerns have already triggered demand destruction and deferral, making price outlook increasingly difficult to predict.

Indonesia and Vietnam face similar feedstock exposure but benefit from relatively stronger domestic demand growth. Malaysia comparatively more resilient due to gas-linked capacity, although downstream derivatives remain exposed to higher input costs.

United States benefits from low-cost natural gas for nitrogen but remains import dependent for potash and phosphate. US farmers facing mounting supply risks, with fertilizer supply risks extending into spring 2027.

Outlook And Impact On Related Chemical Markets

Global fertilizer market weekly update CW35 August 17-24 2026 notes global fertilizer prices may remain elevated through 2028. CoBank believes conflict in Middle East, tight supply, damaged production capacity could keep prices above pre-war levels through 2027-2028.

For food-grade minerals and chemicals, fertilizer trends directly affect related markets. Sulfuric acid price drives zinc sulfate production costs. Zinc sulfate tracks zinc LME plus sulfuric acid. When sulfur surges 130%, zinc sulfate food grade monohydrate costs rise even if zinc metal stable. Phosphate rock processing competes with food-grade dicalcium phosphate production. Higher DAP prices incentivize phosphate rock producers to prioritize fertilizer grade over food grade, tightening food-grade phosphate supply.

Ammonia and urea price increases raise costs for chelated minerals like zinc bisglycinate that use ammonia in synthesis, and for encapsulation materials using urea-formaldehyde.

For buyers, practical approach includes monitoring natural gas and crude oil as leading indicators, tracking sulfur as leading indicator for phosphate pricing, and building tiered budgets with base, pressure, and disruption cases. Companies reassessing supply chains prioritizing resilience alongside cost efficiency will accelerate regionalization trends, encourage investment in integrated production hubs, and increase strategic importance of countries with secure energy and feedstock access.

Fertilizer costs reaching tipping point, with FAO warning 15-20% higher prices enough to materially alter crop economics. That tipping point similar for food-grade premixes where mineral costs represent significant portion of total formulation cost. Securing nitrogen needs early for 2027 planting, considering biological alternatives that demonstrate proven reductions in synthetic needs, and diversifying sourcing away from gas-dependent European production toward regions with secure energy access will be critical through 2027-2028.

Sources:

SunSirs Middle East Conflict Disrupts Agricultural Inputs Market – World Bank Global Commodity Market Outlook April 28 2026 – conflict triggered severe disruptions energy supply chains – natural gas crude oil core raw materials – fertilizer prices projected rise 31% overall 2026 – https://sunsirs.com

Fertilizer Prices Up 35% Food Security Crisis 2026 – World Bank confirmed 35% rise first five months 2026 – urea surged 53.7% March to 725.6 MT highest four years – prices rise average 31% full year worst affordability since 2022 – https://marketsnxt.com

Global Fertilizer Market Faces Long Recovery – CoBank – prices remain elevated through 2028 – tight supply damaged capacity – https://pennsylvaniaagconnection.com