The report’s Fertilizer Affordability Index shows a shift from a period of relative affordability to one where fertilizers have become significantly less accessible
According to the most recent RaboResearch analysis from Rabobank, fertilizer prices are expected to continue rising globally in 2025, which will reduce farmers’ profit margins globally and raise questions about future demand. It claims that even if seasonal demand has decreased and inventories are running low, India is still a major customer in the global fertilizer industry. More and more buyers are taking a cautious, wait-and-see stance.
A time of relative affordability has given way to one in which fertilizers are more harder to obtain, according to the report’s Fertilizer Affordability Index. According to Bruno Fonseca, Senior Analyst-Farm Inputs at RaboResearch, “the fertilizer cycle is clearly changing, and regrettably, the trend is moving toward reduced affordability.” “This unfavorable market scenario is expected to persist throughout the year.”
Fertilizer demand is consistent throughout Africa, Australia, South America, Europe, and the United States, despite persistent geopolitical conflicts.
Farmers’ purchasing power is lowered, especially for fertilizers based on nitrogen and phosphate. Although the study acknowledges that there may not be a significant decrease in fertilizer consumption right away, the downward trend in affordability indicates that declines are unavoidable in the long run.
Additional pressure is being added by supply shortages, particularly for phosphates. The global market’s dynamics and restrictions on Chinese fertilizer exports have made it harder to get both phosphate and nitrogen goods. After the peak internal demand subsides, Fonseca anticipates that China will resume exporting in the second part of 2025.
The difficulties facing the fertilizer industry are part of a larger picture of commodity market volatility. While soybean prices are under pressure because to predictions of a record Brazilian harvest and a decline in U.S. soybean exports to China, the corn market, for example, has upside price potential due to tight global supplies.
Over the past two years, agricultural commodities have seen a decline in price due to trade disputes and tariff threats. Fonseca stated, “We have long warned that U.S. growers would be among the hardest hit by new tariffs,” pointing out that policy-driven shortages has already caused fertilizer costs in the U.S. to rise in comparison to international markets.
Prices for corn, soybeans, and wheat are still within the range established in the summer of 2024, despite market volatility. Fonseca noted that although volatility poses difficulties, it also offers chances to farmers and traders who are prepared to adjust to changing market conditions.
Both the fertilizer and agricultural commodities markets are sailing rough seas as 2025 approaches, with trade policies, supply chain interruptions, and affordability expected to influence the year’s course.
