Fertilizer Markets: a New Era of Risk, Resilience and Efficiency

London, UK, July 7–8, 2026

Insights from the IFA Global Markets Conference 2026

Geopolitical disruption and changing trade routes are once again reshaping fertilizer markets. These themes dominated the 2026 edition of IFA’s Global Markets Conference in London, held under the theme “Understanding Market Dynamics in an Era of Uncertainty,” which brought together analysts, traders, shippers and economists from across the value chain.

Across two days of presentations, one message emerged clearly: uncertainty is no longer a temporary market condition. Eurasia Group's Henning Gloystein set the tone in the opening session, suggesting a continued geopolitical-recession scenario was likely. Geopolitics, he argued, is now the single biggest driver of energy prices and other major economic metrics, ahead of the short-term supply and demand fundamentals that used to dominate headlines.

Geopolitical and logistical risk has become structural

Fertilizer markets have always been connected to energy, agricultural demand and international trade. Today, geopolitical developments can affect all three simultaneously. Regions in and around the Strait of Hormuz are a major source and transit route for urea, sulfur and other fertilizers and raw materials. Argus Media’s Owen Gooch highlighted that the Middle East accounts for roughly 50% of global sulfur exports and more than 30% of global urea exports — so the closure hit nitrogen and phosphate markets hard. An estimated 5.5 Mt of global urea output is estimated to have been disrupted during the conflict to date.

By the time of the conference, FertiStream's Milton Sato reported that traffic through the Strait had stabilized at roughly 30% of normal volumes, still well below historical norms. Kpler's Julia Santos added that a genuine recovery depends on vessels returning to the Gulf, not only on stranded vessels leaving, while cargo backlogs, sharply higher freight and insurance costs, and shipowners' reluctance to enter the region continued to constrain trade. Buyers are seeking more sulfur from the US and Canada for markets including Morocco and Indonesia, and vessel operators are taking longer, more cautious paths during transit, such as the southern Omani passage. Several panelists suggested that some of these shifts may outlast the crisis itself. The volatile status of the Strait of Hormuz was in the spotlight in the days after the conference, with rising military action once again reducing vessel transit numbers.

Fertilizer represents only 4–5% of dry-bulk shipping demand, according to AXSMarine's Hugo Rousse. Slower dry-bulk fleet growth, as shipyards prioritize container vessels and gas carriers, combined with slower sailing speeds for emissions compliance, is tightening vessel availability across the board — a dynamic Fertmax's Daejin Lee expects to persist well beyond the current crisis.

When it comes to sulfur, ICIS's Andy Hemphill noted that the market was already constrained before the conflict, with sanctions on Russian supply increasing dependence on Middle Eastern volumes. Disruption at Hormuz then affected a route used by roughly half of global sulfur trade, while China's effective halt of sulfuric-acid exports in April removed the market's largest swing supplier. Hemphill expects availability to remain exceptionally tight well into 2027.

The effects on phosphate production have been significant. Record-high raw material costs have caused some producers to announce output adjustments, according to ICL's Juan von Gernet.

Affordability is constraining demand and separating markets

Supply-side disruption is only part of the story. Weak farmer economics are also influencing demand. McKinsey's Daniela Nuscheler presented preliminary findings from the firm's fifth Global Farmer Survey of more than 5,400 growers across ten countries. Fertilizer was the leading category in which farmers expected to reduce spending across every surveyed region, for several reasons, including ongoing weather uncertainty. Rabobank's Bruno Fonseca noted that the global fertilizer affordability index was forecast to stay negative through the end of 2026, with margin cycles in markets such as Brazilian soybeans historically taking eight to ten years to turn.

McKinsey’s survey showed that interest in biologicals and slow-release fertilizers continues to grow where the return on investment is clear, and trusted agronomic advisors still outrank AI tools in shaping purchasing decisions, even among the youngest growers.

Brazil illustrates how directly affordability pressure can reduce demand. Agroconsult's Cleber Vieira projected that although Brazilian planted area should stay broadly stable in 2026/27, phosphate application rates were falling in key regions. Overall fertilizer demand could reduce by as much as 7 Mt, compared to 2025.

India shows a different pattern. S&P Global's Saurabh Patil described government intervention — priority gas allocation and emergency LNG tenders — stabilizing nitrogen supply even after ammonia imports fell roughly 35% year-on-year, while sustained irrigation investment has made agriculture more resilient to weather shocks. Phosphate remains the exposed nutrient, constrained by a structural sulfur deficit and continued Chinese export restrictions.

Milton Sato (FertiStream) had earlier framed the broader pattern as a split between subsidized markets, where governments keep buying to protect food security, and cash markets, where farmers and importers defer or reduce purchases in response to market conditions.

Nutrient markets are diverging

Urea has experienced market turbulence, although China had begun to export again and stranded cargoes had been released from the Strait of Hormuz at the time of the conference. Owen Gooch (Argus Media) noted that demand lost to missed application windows is unlikely to be recovered. Ammonia has stayed elevated for longer — CMA-OPIS's Michael Samueli flagged the unusual sight of ammonia trading at a premium to urea on a nitrogen-equivalent basis.

Phosphate remains the tightest of the three nutrients, with Claira Lloyd forecasting India as the standout growth market, with consumption expected to rise by roughly 22% by 2029 before slowing sharply, even as affordability elsewhere remains at record lows.

Potash has arguably fared best. Timothy Evans pointed to supply chains far less exposed to Hormuz, with 2025's market dynamics coming instead from Russian and Belarusian maintenance risk and large China-India contracts. Based on publicly announced projects, future supply growth is expected mainly from Canada, Russia, Belarus and Laos.

Accelerating the shift from volume to performance

Van Iperen's Erik van den Bergh argued that a fertilizer product's value will increasingly be judged not only by the nutrients it contains but by how effectively those nutrients reach the crop, a shift favoring specialty fertilizers, fertigation systems, biostimulants and phosphorus-efficiency technologies.

Decarbonization is another consideration. Poten & Partners' Jack Walters noted that although fertilizer accounts for around 73% of EU ammonia demand, only about 12% of announced clean-ammonia offtake deals actually target fertilizer use, with most aimed at energy and industrial buyers instead. EU policy support through the Carbon Border Adjustment Mechanism (CBAM), the Emissions Trading System (ETS) and Renewable Energy Directive (RED) III is aimed mostly at supply, not demand.

CBAMBOO's Gabriel Rozenberg added that suppliers relying on conservative default emissions values face materially higher CBAM costs than those who can verify actual emissions - in some cases cutting the cost by more than half - making verification readiness a genuine competitive advantage for exporters selling into Europe.

Nitrogen stabilizers are a practical example of the efficiency shift underway. Fertiglobe's Thomas Mannheim explained that urease and nitrification inhibitors can cut nutrient losses and field emissions of nitrous oxide, with the technical case already well established. Adoption remains limited, mainly because farmers do not capture the full economic value of those environmental benefits. IFA's own Nitrogen Stabilizer project is working to close this gap, through common measurement methods and fostering closer collaboration between producers and food companies.

Kynetec's Warrick Steptoe showed a similar dynamic in Brazil, where bionutrition and biopesticides remain the fastest-growing segments of the crop-input market, even in a difficult farm-economy cycle. He shared that biostimulants are now the largest source of value creation in Brazil, while the market’s focus is shifting from adoption toward differentiation.

A closing session on artificial intelligence in market analysis - covering interactive gas-market scenario tools, automated statistical workflows and natural-language analysis of vessel-loading data - reinforced the same theme from a different angle. A common thread ran through all three: useful AI depends on the quality and structure of the underlying data more than on the sophistication of the model, and works best when it assists an analyst’s judgment rather than replacing it.

The market landscape presented in London was not simply one of higher volatility. Geopolitics, logistics, agricultural economics, regulation and technology are becoming more closely connected. For the fertilizer industry, preparedness requires monitoring geopolitical and weather risk, understanding regional affordability, diversifying supply chains, understanding emissions in more detail, and evaluating whether to invest in products that deliver greater nutrient use efficiency.

Markets may recover from individual disruptions, but the wider environment is unlikely to return to the relative stability of the previous decade. Going forward, resilience will come from recognizing signals early, quickly adapting business strategies to evolving local conditions, and optimizing the value of products through innovation.

 

DISCLAIMER: This article draws on speaker presentations and analyst notes from IFA's Global Markets Conference 2026, held in London on 7–8 July 2026. Views and forecasts attributed to individual speakers reflect their own presentations and do not necessarily represent IFA's institutional outlook. This article summarizes information presented by conference speakers, including aggregated market data and independent third-party forecasts; it does not provide guidance on individual-company pricing, production, sales, inventories or commercial strategy. For more on IFA's Market Intelligence Service, visit www.fertilizer.org.