Price Trends: Stability with a Long-Term Downward Trend
According to the latest data from the World Bank, the global fertilizer price index remained relatively stable in Q4 2024, with a modest quarter-over-quarter increase of about 1%, but a significant year-over-year decline of more than 17%. Despite trade restrictions imposed by some countries, overall fertilizer prices have been on a downward trend due to ample supply and stabilized energy costs. Looking ahead, fertilizer prices are expected to decline further in 2025 before gradually stabilizing in 2026. However, strong demand and export restrictions from key producers, such as China, may keep prices above the 2015–2019 average.
Supply & Demand: Market Recovery Amid Regional Challenges
After peaking in 2022–2023, fertilizer production costs have dropped significantly and remained stable over the past few quarters. This has contributed to a moderate recovery in global fertilizer consumption, particularly in the first half of 2024, following a sharp decline in 2023. However, the global market still faces multiple challenges: declining natural gas production in countries like Egypt has constrained fertilizer output, while reduced exports from major producers like China have tightened supply. Despite these challenges, global fertilizer production—especially for urea—is expected to grow in the medium term, with new production capacity concentrated in East Asia and the Middle East.
Trade Policies: Reshaping Global Market Dynamics
Changes in trade policies have had a profound impact on the global fertilizer market. In the first half of 2024, China’s phosphate exports plummeted by 60% year-over-year, while urea exports dropped by approximately 90%. This sharp decline is mainly due to Chinese government policies aimed at keeping domestic fertilizer prices low. Meanwhile, despite international sanctions, Belarus and Russia—two of the world's largest potash producers—have maintained strong export volumes by redirecting trade routes. In the first half of 2024, Russia’s potash exports surged by about two-thirds compared to the previous year.
Europe, facing reduced imports from China and Russia, has increasingly relied on higher-cost suppliers such as Egypt, Morocco, Saudi Arabia, and the United States. This shift highlights the growing influence of geopolitical and policy factors on global fertilizer trade flows.
Price Outlook: Returning to Long-Term Averages
Fertilizer prices have stabilized in recent quarters, bringing the fertilizer-to-food price ratio—a key measure of affordability—closer to its long-term average. This ratio had reached a record high in 2022 due to soaring fertilizer prices, posing significant financial challenges for farmers. As prices have receded from their peak, the market has been gradually rebalancing.
Future Outlook: Balancing Risks and Opportunities
While the market is showing signs of stabilization, certain risks remain. Rising costs of key inputs, such as natural gas, could drive fertilizer prices higher. On the other hand, if China resumes exports of phosphate fertilizers like MAP and DAP, it could put downward pressure on global prices. Overall, after years of extreme volatility, the global fertilizer market is moving toward stability. However, geopolitical shifts, policy changes, and energy prices will continue to be crucial factors shaping future market trends.
Attention: The above information is for commercial reference only due to the diversity of information collected, and Kelewell is not responsible for the authenticity of the data.
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