Global fertilizer markets are on edge. With 169 million tonnes traded in 2024, supplies face strain from China’s export cuts, Red Sea bottlenecks, and the EU’s new 100% tariffs on Russian fertilizers. India’s pivot to Middle Eastern suppliers and Nigeria’s urea surge show resilience, but phosphate shortages and rising costs threaten farmers worldwide. EU growers warn of economic fallout, pushing for biofertilizers and transparency. Could these tensions escalate into a prolonged trade conflict, driving up global food production costs?
The global fertilizer market—critical to sustaining half of the world’s food production—is undergoing its most dramatic transformation in decades. In 2025 alone, 169 million tonnes of fertilizers will cross borders, but supply chains are buckling now under the EU’s 100% tariffs on Russian fertilizers after China’s export cuts and Red Sea shipping disruptions. These shocks aren’t just trade headlines; they’re recalibrating costs and risks for every agricultural stakeholder, from feed producers to policymakers.
GLOBAL FERTILIZER MARKET TRENDS
The fertilizer market is a cornerstone of global agriculture, with nitrogen, phosphate, and potash fertilizers driving crop yields. According to the Agricultural Market Information System (AMIS), 169 million tonnes of fertilizers crossed borders in 2024, underscoring their role as extensively traded commodities. However, recent years have seen significant disruptions:
China’s Export Restrictions: Since 2021, China, a major player accounting for 15% of global urea exports and 30% of phosphate exports, has imposed stringent export controls, including bans and inspection requirements. This led to a 95% drop in urea exports and a 21% decline in phosphate exports, forcing trading partners to seek alternative suppliers. For instance, India, the world’s top urea importer, has diversified its sources to the Middle East and Russia while boosting domestic production.
Geopolitical and Logistical Challenges: Sanctions on Belarus since 2020, the Russia-Ukraine conflict starting in 2022, and 2024 disruptions in the Red Sea and Panama Canal have strained global trade. Elevated risk and insurance costs continue to impact logistics, particularly for potash and phosphate shipments. Despite these challenges, resilience is evident: Belarus and Russia have rerouted potash exports via rail to China, and emerging exporters like Laos are gaining prominence as Asia’s potash hub.
Phosphate Market Constraints: Unlike urea and potash, the phosphate market faces tighter supply constraints. Morocco has increased exports since 2022, but this growth cannot fully offset China’s reduced output. Without new capacity from major producers like Russia or Saudi Arabia, global phosphate export volumes are projected to remain below pre-2022 levels until 2027–2028.
U.S. Tariff Policy: The U.S. introduced a 10% universal tariff on fertilizer imports in 2024, with exemptions for Canada under the USMCA. This policy may raise costs for U.S. farmers and trigger retaliatory measures, potentially affecting Canadian farmers reliant on U.S. phosphate imports (75% of Canada’s phosphate imports from 2020–2024).
These trends highlight a market adapting to disruptions but facing ongoing uncertainties, particularly in phosphate supply and trade policy.
EU’S NEW TARIFF REGIME: A GAME-CHANGER
On May 22, 2025, the European Parliament approved prohibitive tariffs on fertilizers and certain farm products from Russia and Belarus, effective July 1, 2025. The decision aims to curb Russia’s funding for its war against Ukraine and reduce EU dependency on these suppliers, which accounted for 25% of EU fertilizer imports (€1.3 billion) and 15% of agricultural imports (€380 million) in 2023. Key details include:
- Tariff Structure: Nitrogen-based fertilizer tariffs will rise from 6.5% to approximately 100% over three years, effectively halting trade. Other agricultural products face an additional 50% duty.
- Rationale: The European Commission cites food security risks from potential Russian coercive actions, building on earlier tariffs on Russian and Belarusian grain.
- Impact: Russia supplied 25% of the EU’s nitrogen fertilizer imports in 2023, a critical input for 70% of EU fertilizer consumption. Belarus contributed smaller volumes (€30 million in fertilizers). The tariffs aim to bolster domestic production and diversify supply, but mitigation measures are planned to address potential price spikes for EU farmers.
- Global Considerations: The EU has ensured that these tariffs will not affect Russian and Belarusian fertilizer exports transiting to developing countries, avoiding disruptions to global food security.
Kremlin spokesman Dmitry Peskov claimed that the tariffs would increase EU fertilizer costs and reduce quality, asserting strong demand for Russian fertilizers elsewhere. However, these claims require scrutiny, as Russia’s ability to redirect exports may be constrained by logistical costs and market saturation in alternative regions.
INDUSTRY REACTIONS: COPA-COGECA’S PERSPECTIVE
Copa-Cogeca, representing 22 million EU farmers and cooperatives, responded critically to the EU’s tariff decision on May 22, 2025. While supporting the geopolitical rationale, they highlighted significant concerns:
- Lack of Impact Assessment: The absence of a comprehensive impact assessment raises fears of unintended economic consequences for EU farmers, for whom fertilizers are a major cost.
- Need for Diversification: Copa-Cogeca criticized the lack of a clear strategy to source alternatives, urging the EU to promote circular economy solutions like RENURE materials (recycled nutrients from manure) and digestates. They also called for derogations to the Nitrates Directive to allow greater use of livestock manure on crops, reducing reliance on fossil fuel-based fertilizers.
- Regulatory Alignment: The group advocated aligning the Nitrates Directive, cadmium limits, and the Carbon Border Adjustment Mechanism to avoid penalizing farmers with overlapping regulations.
- Market Transparency: Copa-Cogeca proposed monthly fertilizer price reporting and a risk management tool for the supply chain to address the market’s opacity and fragility.
Their statement underscores the tension between geopolitical objectives and agricultural competitiveness, a concern shared by farmers globally facing similar supply chain challenges.
BALANCING GEOPOLITICS AND FARM ECONOMICS
The fertilizer market’s resilience is remarkable but not without cracks. India’s success in diversifying urea suppliers and increasing domestic production offers a model for other regions. Sub-Saharan Africa, for instance, is expanding fertilizer production capacity, with Nigeria’s Dangote Fertilizer Plant boosting urea output. Similarly, West Asia’s investments in nitrogen and potash facilities signal a shift toward regional self-sufficiency. However, phosphate supply remains a bottleneck, with Morocco’s export growth unable to fully compensate for China’s retreat.
The EU’s tariffs, while geopolitically motivated, risk exacerbating price volatility in a market already strained by logistical and policy disruptions. For farmers in North America, Asia, and Africa, the ripple effects could include higher costs if global supply chains tighten further. Developing countries, particularly in Africa, rely on affordable fertilizer imports, and any redirection of Russian supplies to these markets must be monitored to ensure accessibility.
Sustainability is a growing imperative. The push for biofertilizers, organic inputs, and recycled nutrients (e.g., RENURE materials) is gaining traction globally. Brazil’s adoption of biofertilizers in soybean farming and India’s promotion of neem-coated urea demonstrate viable paths to reduce fossil fuel dependency. These innovations align with Copa-Cogeca’s call for circular economy solutions and could mitigate supply risks in the long term.
FORECASTS FOR 2026-2030
Looking ahead to 2026–2030, several trends will shape the fertilizer market:
1. Supply Diversification: Emerging exporters like Laos, Nigeria, and Qatar will play larger roles, particularly in potash and nitrogen markets. Morocco’s phosphate expansion will be critical, but new capacity investments are needed to meet global demand by 2028.
2. Price Volatility: EU tariffs and U.S. import duties may drive short-term price spikes, particularly for nitrogen fertilizers. Monthly price reporting, as proposed by Copa-Cogeca, could enhance transparency and help farmers plan budgets.
3. Sustainability Push: Investments in biofertilizers and nutrient recycling will accelerate, driven by environmental regulations and cost pressures. The EU’s circular economy initiatives could set a global standard, with adoption in Asia and Latin America likely to follow.
4. Geopolitical Risks: On-going tensions in Eastern Europe and potential trade retaliations (e.g., Canada vs. U.S.) could disrupt trade flows. AMIS’s role in providing real-time market data will be crucial for navigating these uncertainties.
5. Regional Growth: Africa and West Asia are poised to expand production, reducing reliance on traditional exporters. However, infrastructure and financing challenges may delay progress, requiring global cooperation.
CONCLUSION
The global fertilizer market stands at a crossroads in 2025, balancing resilience against mounting pressures from trade disruptions, geopolitical policies, and sustainability demands. The EU’s tariffs on Russian and Belarusian fertilizers, while aimed at reducing dependency, highlight the need for a coordinated global strategy to ensure supply stability and affordability. Farmers and agribusinesses must take proactive steps to mitigate risks by forging partnerships with emerging exporters, advocating for transparent pricing, and embracing innovations like biofertilizers. As the market evolves, collaboration among policymakers, industry players, and farmers will be critical to safeguarding global food security and agricultural competitiveness.
References
- AMIS, “Fertilizer Markets Amid Shifts in Global Trade,” May 14, 2025.
- Copa-Cogeca, “European Parliament Greenlights Commission’s Tariff Plan,” May 22, 2025.