Fertilizer
Updated
Summary
Fertilizer feeds crops three main nutrients: nitrogen, phosphate and potash. Nitrogen fertilizers such as urea are made from ammonia, and ammonia is made mostly from natural gas, which the USDA puts at 72-85% of ammonia's production cost. So nitrogen prices track gas prices. Phosphate fertilizers such as DAP need sulfuric acid, made from sulfur, a by-product of oil and gas processing. The Persian Gulf matters for both: the IEA says more than 30% of global urea trade, about 20% of ammonia and phosphate trade, and about half of seaborne sulphur trade pass through the Strait of Hormuz.
Key numbers
Urea, World Bank series (FOB Middle East), September 2026 average: $407.5/t (2025 avg $422.7) (as of 2026-09-30). Source: thedocs.worldbank.org
Urea peak monthly average, April 2026: $856.9/t (as of 2026-04-30). Source: thedocs.worldbank.org
Urea, January-September 2026 average (AA calculation from quarterly values): about $543/t, about 29% above 2025 (as of 2026-09-30). Source: thedocs.worldbank.org
DAP (FOB US Gulf), September 2026: $800.6/t (2025 avg $685.2) (as of 2026-09-30). Source: thedocs.worldbank.org
Potassium chloride (CFR Brazil), September 2026: $367.5/t (2025 avg $347.5) (as of 2026-09-30). Source: thedocs.worldbank.org
World Bank fertilizer index (2010=100), September 2026: 147.0 (2025: 138.7; Q2 2026: 188.2) (as of 2026-09-30). Source: thedocs.worldbank.org
European natural gas, September 2026: $25.42/mmbtu (2025 avg $11.96) (as of 2026-09-30). Source: thedocs.worldbank.org
Share of global urea trade moving through Hormuz (IEA): more than 30% (as of 2026-10-17). Source: iea.org
Share of global seaborne sulphur trade moving through Hormuz (IEA): around half (as of 2026-10-17). Source: iea.org
Urea exports from Hormuz-affected economies, April 2026 vs April 2025 (ITC): -83% (as of 2026-04-30). Source: news.un.org
FAO Food Price Index, September 2026: 136.0 (+5.8% y/y; cereals +17.2% y/y) (as of 2026-09-30). Source: fao.org
Illinois distributor urea price (USDA AMS): $770/short ton (as of 2026-10-02). Source: ams.usda.gov
Timeline
2026-10-02 — World Bank Pink Sheet: September urea $407.5/t, below its 2025 average; DAP $800.6/t; fertilizer index 147.0. (Source: thedocs.worldbank.org)
2026-10-02 — FAO Food Price Index for September: 136.0, up 5.8% y/y, with cereals up 17.2%; FAO cites Hormuz and Black Sea disruptions. (Source: fao.org)
2026-09-24 — FAO Director-General addresses the 2nd Rome Coalition ministerial during UNGA; says the conflict severely disrupts fertilizer markets before the next planting season. (Source: fao.org)
2026-09-16 — World Bank food security update still projects 2026 fertilizer prices more than 30% above 2025, while noting urea fell to $400/t in July. (Source: worldbank.org)
2026-08-04 — UN reports ITC analysis: urea exports from Hormuz-affected economies fell 83% in April 2026 versus April 2025; ammonia fell 75%. (Source: news.un.org)
2026-07-08 — US Commerce lets Moroccan phosphate fertilizers enter free of countervailing duty, under a 2026-06-29 presidential emergency. (Source: federalregister.gov)
2026-07-02 — World Bank Pink Sheet shows urea fell to $453.1/t in June from $856.9 in April. (Source: thedocs.worldbank.org)
2026-06-17 — USITC decides to conduct full five-year reviews of the phosphate fertilizer duty orders on Morocco and Russia. (Source: federalregister.gov)
2026-06-08 — FAO Director-General tells the FAO Council that 20-30% of global fertilizer exports and about half of sulfur exports transit Hormuz; urges no export restrictions on inputs. (Source: fao.org)
2026-05-22 — EU Council suspends tariffs on key nitrogen fertilisers, including urea and ammonia, for one year; Russia and Belarus excluded. (Source: consilium.europa.eu)
2026-05-19 — European Commission adopts a Fertiliser Action Plan to cut import dependence and support farmers. (Source: ec.europa.eu)
2026-05-14 — World Bank says urea passed $850/t in April, up 80% since February, and sulfur prices doubled since January. (Source: blogs.worldbank.org)
2026-05-07 — Rome Coalition for Fertilizer Access and Food Security launches with over 40 countries and organizations. (Source: fao.org)
2026-04-28 — World Bank April CMO forecasts fertilizer prices +31% in 2026 on a 60% urea jump, assuming acute disruption ends in May. (Source: worldbank.org)
2026-03-10 — UNCTAD warns about one-third of global seaborne fertilizer trade, about 16 Mt, passes through Hormuz. (Source: unctad.org)
2026-03-02 — An attack takes Qatar's Ras Laffan LNG complex offline, per the IEA; USITC opens five-year reviews of phosphate duty orders the same day. (Source: iea.org)
2025-07-01 — EU tariffs on Russian and Belarusian fertilisers (Regulation (EU) 2025/1227) start: 6.5% plus EUR 40-45/t, rising to EUR 430/t by 2028. (Source: trade.ec.europa.eu)
2025-06-12 — EU Council adopts the Russia/Belarus agricultural and fertiliser tariffs. (Source: consilium.europa.eu)
Key actors and links
Strait of Hormuz (place:strait-of-hormuz): Chokepoint for more than 30% of global urea trade, about 20% of ammonia and phosphate trade and about half of seaborne sulphur, per the IEA.
2026 Iran war (event:2026-iran-war): The war's Hormuz disruption cut Gulf urea and ammonia exports and drove the April 2026 urea spike.
Natural gas (commodity:natural-gas): Main feedstock and 72-85% of ammonia production cost (USDA ERS), so gas prices set the cost floor for nitrogen fertilizer.
LNG (commodity:lng): Europe's gas price, now about double its 2025 average, is set by LNG; that raises the cost of European nitrogen output.
Qatar (country:qatar): Gulf gas producer whose Ras Laffan complex went offline after a 2026-03-02 attack (IEA); part of the Hormuz-dependent export base.
FAO (actor:fao): Publishes the Food Price Index and convenes the Rome Coalition on fertilizer access; its DG's Gulf share estimates are claims, not trade data.
Fertilizer prices and availability (indicator:fertilizer-prices-availability): The measurable side of this node: World Bank urea, DAP, potash and index series.
Gulf fertilizer disruption (theme:gulf-fertilizer-disruption): The 2026 shock theme this node anchors: lost Gulf urea, ammonia and sulfur exports.
FAO Food Price Index (indicator:fao-food-price-index): Downstream gauge; cereals were 17.2% above a year earlier in September 2026. Fertilizer is one cause among weather, energy and trade.
Grain / cereals (commodity:grain): Cereals are the largest nitrogen users; lower application can cut the next harvest's yields, per FAO's warning.
European Union (actor:european-union): Taxes Russian and Belarusian fertiliser (to EUR 430/t by 2028) while suspending duties on other nitrogen imports for a year.
Russia (country:russia): Large fertilizer exporter facing rising EU tariffs and US countervailing duties on phosphate.
Morocco (country:morocco): Phosphate exporter; US let its fertilizers enter duty free under a 2026 emergency while a duty-order review runs.
United States (country:united-states): Low US gas prices ($2.95/mmbtu in September) favor domestic nitrogen; US eased phosphate import duties in 2026.
Grain/fertilizer export restrictions (policy:food-export-restrictions): FAO urged no export restrictions on agricultural inputs; China's 2026 fertilizer export curbs are UNKNOWN on official sources.
Why it matters now
The Iran war turned that chokepoint into a price shock. The ITC found urea exports from Hormuz-affected economies fell 83% in April 2026 versus April 2025. The World Bank's urea series (FOB Middle East) jumped from $422.7 a tonne on average in 2025 to $856.9 in April. On 2026-04-28 the World Bank forecast fertilizer prices up 31% in 2026 on a 60% urea jump, assuming the acute disruption ended in May. Then urea collapsed: $453.1 in June and $407.5 in September, below its 2025 average. That is not a contradiction. The forecast was for a full-year average, and the January-September urea average is still about 29% above 2025 (AA calculation). But the spike was shorter than assumed. UNKNOWN: primary sources fetched do not explain the June fall; the World Bank says only that urea 'fell back in June'. Leads point to partial Hormuz reopening and resumed Chinese exports, which AA could not confirm on official pages.
The shock has now moved from nitrogen to phosphate and cost. DAP was $800.6 in September, 17% above its 2025 average, while sulfur prices doubled between January and mid-May (World Bank). European gas averaged $25.42/mmbtu in September, about twice 2025, so European nitrogen plants cannot cheaply replace lost Gulf supply. Policy is responding on the import side: the EU suspended duties on urea and ammonia for a year (excluding Russia and Belarus, whose fertiliser tariffs keep rising), and the US let Moroccan phosphate in free of countervailing duty. The food channel is slow. FAO warns that lower application will cut yields at the late-2026 and 2027 harvests. The FAO Food Price Index was 136.0 in September, up 5.8% on a year, with cereals up 17.2%; fertilizer is one cause among weather, freight and energy.
Risks and open questions
Bull case: The case that fertilizer stays a central transmission channel: Hormuz is still contested in October 2026, and the IEA says more than 30% of global urea trade and about half of seaborne sulphur move through it. Phosphate has not normalized: DAP was $800.6/t in September, 17% above its 2025 average, and sulfur, a by-product of Gulf oil and gas, feeds phosphate production. European gas at $25.42/mmbtu, about double 2025, keeps European nitrogen costly, so Europe cannot easily replace Gulf urea. FAO and the World Bank both warn that cost and scarcity will lower application rates, which hits yields with a lag, at the late-2026 and 2027 harvests. Cereals are already 17.2% above a year earlier. A new closure before the Northern Hemisphere spring buying season could repeat the April spike, when urea rose 80% from February to April. Inference (AA): the April-June episode showed how quickly a supply shock reaches prices; the lagged yield effect has not yet been measured.
Bear case: The case that the fertilizer shock is fading: the World Bank's urea series fell from $856.9/t in April to $407.5 in September, below its 2025 average and 18% below Q3 2025. The fertilizer index is 147.0, only 6% above its 2025 average. Potash is near normal. Markets adapted: governments cut import duties (EU, US) and buyers turned to other suppliers (AA inference; trade data on substitution not verified). On the arithmetic, the World Bank's April forecast of +31% for 2026 would need a fourth-quarter index near 236, far above any month this year, so its October update is likely to cut the forecast (AA speculation). Food inflation is driven by weather, freight and energy as much as fertilizer, and dairy prices are falling. If urea stays near $400, the 'fertilizer crisis' framing overstates what farmers outside the most import-dependent countries face. Caveat: one FOB Middle East benchmark may not show delivered prices; Illinois distributors still quoted urea at $770 per short ton on 2026-10-02.
Falsifiers: - World Bank monthly urea back above $600/t before the 2027 spring season would falsify 'the nitrogen shock has passed'. - World Bank October 2026 CMO keeping its 2026 fertilizer forecast near +31% would contradict AA's reading that the April forecast is stale. - DAP falling back to its 2025 average (about $685/t) would weaken the phosphate/sulfur channel. - FAO or USDA crop data showing no yield loss in 2026/27 harvests in import-dependent countries would weaken the lagged-yield thesis. - European gas falling toward its 2025 average (about $12/mmbtu) would remove much of Europe's nitrogen cost penalty. - Official trade data showing Gulf urea exports back to 2025 volumes would show the supply channel has normalized.
What to watch
World Bank Pink Sheet with October prices for urea, DAP, potash and the fertilizer index (2026-11-03); Source: worldbank.org
World Bank October 2026 Commodity Markets Outlook: revised 2026-2027 fertilizer and urea forecasts (2026-10-17 to 2026-10-31 (World Bank lists 'October 2026', no day)); Source: worldbank.org
FAO Food Price Index for October (2026-11-06); Source: fao.org
USITC full five-year reviews of US countervailing duty orders on phosphate fertilizers from Morocco and Russia (no scheduled date); Source: federalregister.gov
Expiry or extension of the EU's one-year nitrogen fertiliser tariff suspension (2027 (one year after Official Journal publication; exact date UNKNOWN)); Source: consilium.europa.eu
Next step-up in EU tariffs on Russian and Belarusian fertilisers toward EUR 430/t (by 2028); Source: trade.ec.europa.eu
Northern Hemisphere spring 2027 fertilizer buying meeting a still-contested Hormuz; risk of a second urea spike (no scheduled date); speculative, no scheduled source
AA inference
Inference (AA): Fertilizer is the graph's slow-moving bridge from Gulf energy and Hormuz to crop yields and food prices. The causal chain is: gas and sulfur supply, ammonia, urea and DAP costs, application rates, yields one or two seasons later, then grain and food prices. The 2026 record shows two speeds. Nitrogen prices spiked and mostly reversed within three months, so a single monthly urea print is a poor guide to the crisis. Phosphate and European gas costs remain elevated, and the yield effect has not yet shown up in data. Different 'Gulf share' figures (about a quarter, more than 30%, a third, 30-35%, 43%) mostly reflect different denominators: global exports versus global trade versus seaborne trade, and 'Middle East' versus 'Hormuz-dependent' country sets. The view weakens if urea stays near $400 through spring 2027 buying and harvests in import-dependent countries hold up.
Sources
Ammonia is the main input for all nitrogen fertilizers, and natural gas accounts for 72-85% of the cost of producing ammonia, depending on plant size and ammonia price (USDA ERS, August 2007). (Source: ers.usda.gov, accessed 2026-10-17)
About 70% of ammonia is used for fertilisers, and just over 70% of ammonia production uses natural gas-based steam reforming (IEA Ammonia Technology Roadmap). (Source: iea.org, accessed 2026-10-17)
IEA: more than 30% of global trade of urea moves through the Strait of Hormuz, along with about 20% of trade of ammonia and phosphate, and around half of global seaborne sulphur trade. (Source: iea.org, accessed 2026-10-17)
IEA: about 20% of the world's LNG supply moved through the Strait of Hormuz in 2025, and Qatar's Ras Laffan LNG facility has been offline since an attack on 2026-03-02. (Source: iea.org, accessed 2026-10-17)
UNCTAD (2026-03-10): around one-third of global seaborne fertilizer trade, about 16 million tonnes, passes through the Strait of Hormuz. (Source: unctad.org, accessed 2026-10-17)
World Bank (2026-05-14 blog on the April 2026 CMO): the Middle East accounts for nearly one-quarter of global urea exports, and the Strait handles a large share of global sulfur and ammonia shipments. (Source: blogs.worldbank.org, accessed 2026-10-17)
UN News reporting an International Trade Centre (ITC) analysis: the Strait carries a third of globally traded urea; between April 2025 and April 2026 urea exports from the affected economies fell 83% and ammonia exports 75%, and combined export volumes of the 12 products tracked fell 54%. (Source: news.un.org, accessed 2026-10-17)
FAO Director-General Qu Dongyu told the 181st FAO Council (8-12 June 2026) that 20-30% of global fertilizer exports and approximately 50% of global sulfur exports transit the Strait of Hormuz. (Source: fao.org, accessed 2026-10-17)
World Bank (2026-04-28): fertilizer prices are projected to increase by 31% in 2026, driven by a 60% jump in urea prices; the forecast assumed the most acute disruptions end in May and Hormuz shipping gradually returns to pre-war levels by late 2026. (Source: worldbank.org, accessed 2026-10-17)
World Bank (2026-05-14): urea climbed above $850 per tonne in April 2026, up 80% since February; sulfur prices doubled since January; fertilizer affordability fell to its weakest level since mid-2022. (Source: blogs.worldbank.org, accessed 2026-10-17)
World Bank Pink Sheet (2026-07-02): monthly urea (E. Europe series, prill spot FOB Middle East) averaged $856.9/t in April, $770.5 in May and $453.1 in June 2026; the fertilizer index was 208.7, 199.7 and 156.1. (Source: thedocs.worldbank.org, accessed 2026-10-17)
World Bank Pink Sheet (2026-10-02): urea averaged $422.7/t in 2025, $537.7 in Q1 2026, $693.5 in Q2 and $399.2 in Q3; September 2026 was $407.5. Q3 2025 was $488.3 (July Pink Sheet). (Source: thedocs.worldbank.org, accessed 2026-10-17)
World Bank Pink Sheet (2026-10-02): DAP (spot FOB US Gulf) was $800.6/t in September 2026 versus a 2025 average of $685.2 and a 2024 average of $563.7; TSP was $690.0 versus $577.6. (Source: thedocs.worldbank.org, accessed 2026-10-17)
World Bank Pink Sheet (2026-10-02): potassium chloride (granular spot CFR Brazil) was $367.5/t in September 2026 versus a 2025 average of $347.5; phosphate rock was $170.0 versus $152.5. (Source: thedocs.worldbank.org, accessed 2026-10-17)
World Bank Pink Sheet (2026-10-02): the fertilizer price index (2010=100) was 147.0 in September 2026 versus 138.7 for 2025 and 117.6 for 2024; quarterly 2026 values were 154.7 (Q1), 188.2 (Q2) and 147.6 (Q3). (Source: thedocs.worldbank.org, accessed 2026-10-17)
World Bank Pink Sheet (2026-10-02): European natural gas averaged $25.42/mmbtu in September 2026 versus $11.96 in 2025; US natural gas was $2.95 versus $3.53. (Source: thedocs.worldbank.org, accessed 2026-10-17)
World Bank (June 2026 Food and Nutrition Security Update): fertilizer prices rose 35% in the first five months of 2026 year on year; the June 2026 Global Economic Prospects projects fertilizer prices to rise 38% in 2026; urea climbed sharply through April before falling back in June. (Source: thedocs.worldbank.org, accessed 2026-10-17)
World Bank (September 2026 Food and Nutrition Security Update, as of 2026-09-16): urea dropped to $400 per ton in July, and fertilizer prices are projected to increase by more than 30% compared to last year. (Source: worldbank.org, accessed 2026-10-17)
World Bank: the next Pink Sheet is due 2026-11-03; the next Commodity Markets Outlook update is listed as October 2026, and the April 2026 CMO remains the latest edition as of 2026-10-17. (Source: worldbank.org, accessed 2026-10-17)
FAO Food Price Index (released 2026-10-02): 136.0 points in September 2026, up 1.5% from August and 5.8% from a year earlier; the cereal index was 17.2% higher than in September 2025, sugar 14.7% higher, and dairy 19.1% lower. Next release 2026-11-06. (Source: fao.org, accessed 2026-10-17)
FAO's September FFPI release cites AMIS's Market Monitor on 'firmer fertilizer markets' and FAO's chief economist on disruptions in the Strait of Hormuz and the Black Sea. (Source: fao.org, accessed 2026-10-17)
FAO (2026-05-07): the Rome Coalition for Fertilizer Access and Food Security launched with ministers and senior representatives from over 40 Mediterranean and partner countries and organizations; FAO warned fertilizer scarcity would lower yields and tighten food supplies in late 2026 and into 2027. (Source: fao.org, accessed 2026-10-17)
FAO (2026-09-26): at the 2nd Ministerial Meeting of the Rome Coalition, held during UNGA, the Director-General said the Middle East conflict triggered a compound crisis severely disrupting fertilizer markets ahead of the next planting season. (Source: fao.org, accessed 2026-10-17)
EU Regulation (EU) 2025/1227 applies from 2025-07-01: imports of fertilisers (HS 3102 and listed 3105 lines) from Russia and Belarus face a 6.5% duty plus a specific levy of EUR 40-45 per tonne in 2025-2026, rising gradually to EUR 430 per tonne by 2028. (Source: trade.ec.europa.eu, accessed 2026-10-17)
Council of the EU (2025-06-12): it adopted the tariffs to reduce EU dependence on Russian and Belarusian imports and Russian export revenues; fertiliser tariffs rise over a three-year transition. (Source: consilium.europa.eu, accessed 2026-10-17)
Council of the EU (2026-05-22): it suspended for one year customs tariffs (normally 5.5-6.5%) on key nitrogen fertilisers including urea and ammonia, within a quota equal to 2024 MFN imports plus 20% of 2024 imports from Russia and Belarus; Russia and Belarus are excluded. The Commission estimates EUR 60 million in duty savings. (Source: consilium.europa.eu, accessed 2026-10-17)
European Commission (2026-05-19): it adopted a Fertiliser Action Plan to strengthen EU production and reduce import dependency, and warned rising costs risk forcing farmers to reduce application rates. (Source: ec.europa.eu, accessed 2026-10-17)
US Commerce (Federal Register, 2026-07-08): under a presidential emergency declared 2026-06-29 under section 318(a) of the Tariff Act of 1930, Moroccan phosphate fertilizers subject to the countervailing duty order may enter duty free on request, to ensure sufficient fertilizer supply for US farmers. (Source: federalregister.gov, accessed 2026-10-17)
USITC (2026-03-02) instituted five-year reviews of the 2021 countervailing duty orders on phosphate fertilizers from Morocco and Russia, and later (2026-06-17) decided to conduct full reviews. (Source: federalregister.gov, accessed 2026-10-17)
USDA AMS Illinois Production Cost Report (2026-10-02): average distributor prices were $945/ton for anhydrous ammonia, $770 for urea, $929.29 for DAP and $516.36 for potash. (Source: ams.usda.gov, accessed 2026-10-17)