Semiannual fertilizer outlook: Supply risks persist while affordability and weather constrain demand

Global agricultural markets continue to absorb the effects of the Middle East conflict. Supply remains at risk amid uncertainty surrounding flows through the Strait of Hormuz. Affordability remains a significant challenge for farmers, especially at a time when financial constraints are weighing heavily on them globally. Another important concern in the coming months is weather, with El Niño threatening crops.

The conflict in the Middle East continues to affect the nitrogen market amid uncertainty about flows from Middle Eastern producing countries. China’s return to the export market provides some relief to global supply, but not enough to resolve the situation. At the same time, China’s absence from the phosphate market, combined with higher sulfur prices and global supply constraints, is keeping phosphate prices elevated.

Fertilizer prices have eased from their initial peaks after the start of the Middle East conflict, but crop prices and farm margins have not improved enough to restore purchasing power. RaboResearch’s fertilizer affordability index has improved from the lows reached after the conflict began, but fertilizers remain unaffordable for farmers. The most challenging situation is in phosphates, with RaboResearch’s affordability index at -0.59.

Commodity markets remain well supplied despite geopolitical tensions, trade disruptions, weather risks, and pressures on farm profitability. While global production and stocks of major row crops are expected to decline slightly in 2026, inventories remain historically high, keeping prices within established ranges. However, risks from El Niño, rising input costs, and Black Sea export challenges may increase uncertainty and support prices near the upper end of recent trading ranges over the next six to twelve months.