Fertilizer Prices Surge Amidst Geopolitical Tensions and EU Dependency

Global fertilizer prices are experiencing significant increases, driven by geopolitical instability, particularly in the Iran conflict, and the European Union’s substantial reliance on imports. The World Bank’s fertilizer index rose by 6.5% in February 2026, compared to January, reaching 144.96 points . This upward trend, following a 2.4% increase in January, signals a potentially prolonged period of elevated costs for agricultural production.

Impact of the Iran Conflict and Energy Prices

The ongoing conflict in the Iran region is a key factor influencing fertilizer prices. Approximately one-third of global fertilizer trade transits through the Strait of Hormuz, making it a critical chokepoint. natural gas is a central input in the production of ammonia and urea, accounting for up to 70% of production costs. Rising energy prices, exacerbated by the conflict, directly translate to higher fertilizer production costs and potential supply disruptions.

European gas prices have surged, increasing by over 60% since the escalation of the conflict, with some market reports indicating even larger swings. This poses a significant challenge for European nitrogen fertilizer production, as higher gas prices directly impact ammonia and urea costs.

EU’s Import Dependency

The European Union is structurally dependent on fertilizer imports, with an estimated import dependency of around 45% for nitrogen, 46% for phosphates, and 58% for potash. This reliance makes the region particularly vulnerable to global price fluctuations and supply chain disruptions.

Price Increases on the German Cash Market

The tense market situation is reflected in price increases on the German cash market in March. Protected urea prices rose by €141/t to €684/t, even as lime ammonium saltpeter increased by €62/t to €426/t, and AHL by €55/t to €409/t. Sulfur-containing nitrogen fertilizers similarly saw notable increases: ammonium sulfate saltpeter rose by €49/t to €466/t, and sulfuric ammonia by €38/t to €369/t. Phosphate fertilizers also increased, with triple superphosphate rising by €45/t to €607/t and diammonium phosphate by €53/t to €792/t. Kornkali remained relatively stable at €327/t.

Impact on Wheat and Corn Cultivation

These price increases have significant implications for wheat and corn cultivation. Bread wheat, which requires a needs-based and high-quality nitrogen supply, faces increased economic pressure. Farmers are critically evaluating the viability of further nitrogen applications, particularly where higher protein qualities are not adequately rewarded by the market. The fertilizer market is not only a cost factor for wheat but also a potential quality risk.

Corn, a nitrogen-intensive crop, is also significantly affected by the rising costs of fertilization. Limiting or delaying nitrogen doses to reduce costs could jeopardize yield potential. A weaker euro further exacerbates the situation, as a large portion of international fertilizer trade is invoiced in US dollars, increasing purchase costs within the EU.

Looking Ahead

The combination of rising energy prices, higher input costs, logistical risks, currency effects, and high import dependency creates a challenging environment for the grain sector. The World Bank does not anticipate any rapid relief in the short term. The procurement environment will likely remain tense, requiring careful management of fertilizer applications and a close watch on market developments.