RaboResearch: Poor Affordability to Pressure Global Fertilizer Demand in 2026

By Rabobank|28 October 2025

A new RaboResearch report reveals that global fertilizer markets are entering a new phase of contraction, as rising prices begin to weigh on demand. This is reflected in the continued decline of the fertilizer affordability index, and while some regions still show signs of resilience, the broader trend points to weakening demand in 2025 and a more pronounced downturn in 2026.

Affordability index signals tough year ahead for global fertilizer demand

Commodities prices have remained largely stable since the start of the year. The decline in the fertilizer affordability index is primarily due to an increase in global fertilizer prices. Between April 2025 and the end of September 2025, fertilizer prices increased by approximately 15%. Phosphates saw an increase of almost 19%. As a result, the phosphate index declined to -0.74 in September, matching the lowest point recorded in the past 15 years. “The nitrogen index also fell and is forecast to decline further in 2026, negatively affecting demand from countries in the Northern Hemisphere,” notes Bruno Fonseca, Senior Analyst – Farm Inputs for RaboResearch. “The overall index should continue to move lower, with the 12-month moving average on the negative phase getting very close to the previous negative phase from 2022.”

The globe is awash in supply

Agricultural commodity prices remain under downward pressure, as the world’s production machine is hitting on all cylinders in 2025. In 2025, global corn, wheat, and soybean production reached record levels. At the same time, there is record domestic consumption, and corn and wheat are in the midst of a multi-year decline in stocks. However, the market is focused on supply, which is putting downward pressure on agri commodity prices for the foreseeable future.
“While there is a case to be made for prices to be well-supported from current levels, record production in major production areas like Brazil and the US is overwhelming the market with supply,” explains Fonseca. “This will keep prices depressed in the short-to-medium term. Challenging profitability in the grain and oilseed sector portends poor fertilizer affordability and potential decline in fertilizer use in the coming year.”

Preparing for the impact of CBAM on EU fertilizer prices in 2026

The EU’s Carbon Border Adjustment Mechanism (CBAM) will impose a carbon tax on approximately 15 million metric tons of nitrogen-containing fertilizer imports annually. This marks a pivotal shift in the EU’s climate policy, integrating carbon costs into imported goods and reshaping fertilizer sourcing and pricing dynamics. The CBAM will have a significant price impact on high-emission nitrogen fertilizers, particularly ammonia and urea, which dominate EU import volumes and carry the highest embedded emissions. Importers are expected to adopt strategic cost management approaches, including sourcing from suppliers with verified emissions data and decarbonization plans. Hedging strategies, such as early CBAM certificate purchases and the use of EUA futures, can mitigate carbon price volatility and support liquidity planning.