Global fertilizer markets are under severe strain following geopolitical disruptions, raising concerns over farm economics, crop output and food price stability, according to a new report by RaboResearch.

In its latest assessment released on April 8, the research arm, a unit of Rabobank, said the sector ended the first quarter of 2026 with tight availability, sharply higher prices and elevated volatility across key nutrients. Escalating tensions in West Asia and the effective closure of the Strait of Hormuz have removed a substantial volume of fertilizers and critical inputs from global trade, triggering a supply shock that cannot be quickly replaced.

Fertilizer affordability has deteriorated sharply, with nitrogen and phosphate prices rising much faster than agri-commodities, compressing farm margins. “Our fertilizer affordability index has moved decisively into negative territory and is expected to remain constrained throughout 2026,” said Bruno Fonseca, Senior Analyst – Farm Inputs with RaboResearch. He warned this could lead to “demand destruction” as farmers cut application rates, delay purchases or shift crop choices.

India’s subsidy concerns

For India, the impact is particularly significant given its heavy dependence on imports, especially for phosphates and potash. Higher global prices could increase subsidy burdens for the government and strain farm profitability, even as policymakers attempt to shield farmers from price shocks.

Nitrogen markets are expected to see one of the steepest demand declines in 2026, while phosphate markets remain under pressure. Potash is relatively balanced but may face indirect demand weakness. Protectionist trade measures are also limiting alternative sourcing, reinforcing supply tightness. Even if geopolitical tensions ease, normalisation is expected to be slow, with elevated prices likely to persist into 2027.

Wheat under threat

Despite these pressures, global agricultural supply remains comfortable in the near term. Most fertilizer inputs for the Northern Hemisphere’s 2026 crop were secured before the conflict. Large harvests are expected in key producing regions, including record soybean output in Brazil and ample corn and soybean plantings in the US. However, there are concerns about the 2026 wheat crop due to dry conditions in Canada, the US and parts of Argentina, heat stress in India, and mixed conditions in the Black Sea region. Additionally, higher fertilizer costs have Australian farmers looking for alternatives to wheat.

Looking ahead, sustained high fertilizer costs could reduce application rates from 2027, weighing on yields. Even so, strong supply fundamentals are expected to keep agricultural commodity price rallies in check.

Published on April 15, 2026