Global fertilizer prices to remain high through 2028 — CoBank

Global fertilizer prices could remain elevated through at least 2028 due to reduced production, raw material shortages and disruptions to global trade. According to US agricultural lender CoBank, the current situation differs from the 2022 price shock: back then, the market primarily had to adjust trade flows, while today some production capacity is physically unavailable and will take time to restore.

The Middle East has emerged as one of the main risk factors. CoBank estimates that the conflict has directly affected or completely shut down around 31 ammonia plants, while another 49 facilities in India, Pakistan and Bangladesh have reduced or halted production due to limited feedstock supplies. Around 45 mln tons of fertilizers and raw materials are shipped through the Strait of Hormuz, meaning disruptions in the region have a direct impact on global supply.

The phosphate fertilizer market remains particularly vulnerable, as supplies were already tight before the latest escalation. Production depends heavily on ammonia and sulfur, both of which are now under supply pressure, while China has also restricted phosphate fertilizer exports. According to an Argus forecast cited by CoBank, global DAP, MAP and TSP production could fall below 60 mln tons in 2026, compared with an earlier projection of nearly 69 mln tons.

Analysts do not expect prices to quickly return to previous levels. North Dakota State University estimates that average 2027 prices could reach around $496 for urea, $666 for DAP, $660 for MAP, $619 for ammonia and $361 for UAN. Although these levels are below the peak forecasts made after the escalation, they remain significantly above pre-crisis levels.

High prices are already forcing farmers to reduce fertilizer use. In the US, phosphorus and potassium application rates have declined by 10–15% in recent years, while farmers have been less willing to cut nitrogen use because of its direct impact on yields. However, prolonged reductions in nutrient application could lead to soil nutrient depletion and lower crop productivity within two to three years.

CoBank warns that expensive fertilizers could ultimately affect global agricultural commodity prices as well. If farmers around the world continue reducing application rates, lower yields could constrain global supplies of grain and other crops and provide support to prices. For farmers, this means elevated production costs are likely to persist for several more seasons, with fertilizer markets potentially remaining structurally more expensive through at least 2028.

Tags: prices, fertilizers