Conflict puts pressure on fertilizer prices and raises costs for producers.

Fertilizer prices are expected to rise sharply in 2026, pressured by market factors and the worsening conflict in the Middle East. According to the March Agroinfo report by Rabobank, the increase in input costs was already observed at the beginning of the year, but has intensified in recent weeks, raising production costs and raising concerns about demand in Brazil.

In the first two months of 2026, the main fertilizers imported by the country registered an average increase of around 17%. Urea and MAP (monoammonium phosphate) led the movement, with increases of 19% and 17%, respectively. With the start of the conflict, the escalation intensified, especially in the case of urea, which accumulated an increase of over 46% in just three weeks. In the accumulated year up to March 20, the increase in the input has already reached 76%.

MAP, which was already on an upward trajectory before the geopolitical tensions, also began to reflect the new scenario. With lower global availability and higher sulfur costs, the fertilizer surpassed the US$800 per ton mark, the highest level since August 2022.

Demand is expected to decline amid tight margins.

Despite the high cost environment, Brazil recorded a record volume of fertilizer deliveries to end consumers in 2025, exceeding 49 million tons. However, a decline is expected for 2026.

The bank's research arm, RaboResearch, projects a reduction of almost 2 million tons in deliveries, which should fall to around 47,2 million tons. This movement reflects not only higher prices but also the tighter margin environment faced by farmers.

However, in the case of urea, the import schedule may mitigate some of the short-term impacts. Historically, about 70% of the volume imported by Brazil arrives in the country starting in May. However, the continuation of the conflict in the Middle East could compromise global supply, especially due to its direct relationship with natural gas production—a key input for nitrogen fertilizers.

Geopolitics and credit remain on the radar.

The report highlights that geopolitics remains a major factor of concern for the fertilizer market, with direct impacts on international production and prices.

Furthermore, the financial situation of Brazilian producers remains a critical point. The increase in input costs, combined with pressure on margins, may limit purchasing power and influence planting decisions throughout the 2026/27 crop season.