Fertilizer Prices Surge in 2025, Squeezing Farmers' Purchasing Power: Rabobank Report

India continues to be a key buyer in the global fertilizer market

Global fertilizer prices are on an upward trajectory in 2025, tightening margins for farmers worldwide and raising concerns about future demand, according to the latest RaboResearch report from Rabobank. It says that India continues to be a key buyer in the global fertilizer market, though seasonal demand has softened and stockpiles are running low. Buyers are increasingly adopting a cautious, wait-and-see approach.

The report’s Fertilizer Affordability Index shows a shift from a period of relative affordability to one where fertilizers have become significantly less accessible. "We are seeing a clear transition in the fertilizer cycle, and unfortunately, the trend is moving toward reduced affordability," said Bruno Fonseca, Senior Analyst - Farm Inputs at RaboResearch. "This unfavorable market scenario is expected to persist throughout the year."

Despite ongoing geopolitical tensions, fertilizer demand remains stable across regions such as Africa, Australia, South America, Europe, and the United States. 

Nitrogen and phosphate-based fertilizers are particularly affected, with farmers facing reduced purchasing power. While the report notes that a major drop in fertilizer demand may not be immediate, the negative affordability trend suggests eventual declines are inevitable.

Supply constraints, especially for phosphates, are adding further pressure. Restrictions on Chinese fertilizer exports, combined with shifting global market dynamics, have tightened supplies of both phosphate and nitrogen products. Fonseca expects China to resume exports in the second half of 2025 after peak domestic demand subsides.

The fertilizer sector’s challenges come amid a broader landscape of uncertainty in commodity markets. The corn market, for instance, holds upside price potential due to tight global stocks, whereas soybean prices are under pressure, driven by forecasts of a record Brazilian harvest and declining U.S. soybean exports to China.

Trade conflicts and tariff threats continue to weigh heavily on agricultural commodities, dampening prices over the past two years. "We have long warned that U.S. growers would be among the hardest hit by new tariffs," Fonseca said, noting that policy-driven scarcity has already led to higher fertilizer prices in the U.S. compared to global markets.

Despite market volatility, prices for corn, soybeans, and wheat are still trading within the range set during the summer of 2024. Fonseca pointed out that while volatility presents challenges, it also creates opportunities for farmers and traders willing to adapt to shifting market dynamics.

As 2025 unfolds, both fertilizer markets and agricultural commodities are navigating turbulent waters, with affordability, supply chain disruptions, and trade policies set to shape the outlook for the year ahead.