Rabobank: Fertilizer prices trending higher in 2025

“RaboResearch’s fertilizer affordability index indicates a transition between cycles, moving from a period of relative affordability to one where fertilizers are less affordable and the index turns negative,” said Bruno Fonseca, senior analyst – farm inputs with RaboResearch. “We expect this unfavorable scenario for the fertilizer market to persist throughout the year.”

Considering various factors at play, the fertilizer market is expected to face another challenging year, particularly in the case of nitrogen and phosphate-based products, he said.

“Farmers will struggle with reduced purchasing power for these nutrients, which may not immediately result in demand cuts in 2025, but the negative affordability index indicates such reductions will occur eventually,” Fonseca said.

Fertilizer needs are stable in regions such as Africa, Australia, South America, Europe and the United States, despite geopolitical uncertainty. India has been a consistent buyer in the fertilizer market. However, seasonal demand has decreased, and stocks have been depleted, the study said. As a result, market activity has diminished with buyers taking a wait-and-see approach.

Supplies of some nutrients, such as phosphates, remain constrained due to changes in the global dynamics of the main players and restrictions on exports from China, Fonseca said. These restrictions also are impacting nitrogen fertilizers.

“We expect that China will resume exports in the second half of 2025, once domestic demand decreases after top-dressing applications are completed,” he said.

Markets and farmers are facing uncertainties from all directions, with varying sentiments in the commodities markets.

The corn market has significant upside price potential due to tight global stocks and a multi-year decline in the stocks-to-use ratio. Soybeans lie on the other end of the price spectrum, as the prospects of a record Brazilian crop and declining US soybean exports to China paint a bearish scenario for soybean prices, the study said.

Tariff threats are the main issue. Expectations are that tariffs and ongoing trade conflicts will weigh on agricultural commodity prices, which have been depressed for the past two years.

“We have long cautioned that US growers will suffer the most from the newly imposed tariffs,” Fonseca said. “Ultimately, the economics of supply and demand and the price of marginal tons will prove relevant. Over the last year or more, policy changes have led to scarcity, resulting in higher prices for US fertilizers compared to global markets, and this trend may continue in the future. However, corn, soybean and wheat markets are still trading within the range established in the summer of 2024, despite all the market volatility and bearish sentiment, and the increased volatility provides opportunities for all.”

Supplies of some nutrients, such as phosphates, remain constrained due to changes in the global dynamics of the main players and restrictions on exports from China. These restrictions are also impacting nitrogen fertilizers.

“We expect that China will resume exports in the second half of 2025, once domestic demand decreases after top-dressing applications are completed,” Fonseca said.