High fertiliser prices increase the risk of lower crop yields

Global fertilizer prices are likely to remain elevated through at least 2027 and could stay high into 2028. According to CoBank, the key factors include conflict in the Middle East, disruptions to feedstock supplies and tight phosphate availability, which continue to increase costs for farmers.

Supplies from the Middle East remain particularly vulnerable. The region provides the global market with more than 60 mln tons of fertilizers and raw materials annually, around 45 mln tons of which are shipped through the Strait of Hormuz. The region accounts for more than 30% of global urea exports and around half of globally traded sulfur, making international prices highly sensitive to supply disruptions.

The conflict has already resulted in significant production disruptions. According to CoBank, 31 ammonia plants in the Middle East have been directly affected or completely shut down. Another 49 plants in India, Pakistan and Bangladesh have curtailed or halted operations due to limited feedstock availability. Damage to fertilizer plants in russia is adding further pressure to global supplies.

Phosphate markets remain particularly tight. Rising ammonia and sulfur prices are increasing production costs, while China, the world’s largest producer and exporter of phosphate fertilizers, has restricted exports through the end of August. CoBank believes high sulfur prices could lead to an extension of these restrictions, keeping international supplies tight.

High fertilizer costs are already forcing farmers to adjust nutrient management strategies. In the US, growers are increasingly relying on soil testing, variable-rate applications and precision agriculture, while phosphate and potash application rates have declined by 10–15% in recent years. CoBank warns that prolonged reductions in nutrient applications could eventually weigh on crop yields, while lower fertilizer use globally could provide additional support to grain prices.

Tags: Pakistan, India, USA, fertilizers