World Bank expects fertiliser prices to ease in 2027

Urea and phosphate fertiliser prices expected to decline as energy costs moderate and global supply conditions improve Global fertiliser prices are projected to increase by an average of 14% in 2026 before easing in 2027, according to the World Bank's latest Commodity Markets Outlook, as lower energy costs and improved access to production inputs are expected to support a recovery in supplies. The October 2026 report forecasts that international urea prices, based on the Eastern European benchmark, will average $510 per metric tonne in 2026, compared with $423 per tonne in 2025, representing an increase of 20.6%. However, urea prices are expected to decline by 15.9% to $429 per tonne in 2027 and fall further to $368 per tonne in 2028. Diammonium phosphate (DAP) prices are projected to increase by 7.3% to $735 per tonne in 2026, compared with $685 per tonne in 2025, before declining by 18.1% to $602 per tonne in 2027 and $501 per tonne in 2028. The World Bank said the increase in fertiliser prices during 2026 largely reflected a surge in urea prices earlier in the year, following disruptions to Middle Eastern supplies and higher production costs. The initial near-closure of the Strait of Hormuz disrupted fertiliser exports, while elevated natural gas, ammonia and sulphur costs contributed to price pressures across several fertiliser categories. However, international fertiliser prices declined by 22% during the third quarter of 2026 compared with the previous quarter, fully reversing the increase recorded in the second quarter. The decline was largely driven by falling urea prices as China accelerated exports following the relaxation of restrictions. According to the report, China's urea exports during the first eight months of 2026 reached approximately 1.4 million metric tonnes, matching the level recorded during the corresponding period of the previous year. Around two-thirds of these exports were shipped during July and August, helping replace part of the supplies disrupted by restrictions on shipments through the Strait of Hormuz. The World Bank said China's large coal-based urea industry, accumulated inventories and additional production capacity have strengthened its ability to respond to changes in international fertiliser supplies. Meanwhile, DAP prices increased by 4% during the third quarter of 2026, following a 20% increase in the preceding quarter, as elevated input costs continued to affect phosphate fertiliser markets. Other fertilisers, including potash, are also expected to record higher average prices in 2026, partly because farmers have shifted purchases away from more expensive fertiliser products. The report projects potassium chloride prices to average $383 per tonne in 2026, up 10.1% from the previous year, before declining to $347 per tonne in 2027. Triple superphosphate prices are forecast to increase by 11.8% to $646 per tonne in 2026, followed by a decline to $550 per tonne in 2027. The World Bank expects average fertiliser prices to return to approximately their 2025 levels next year, assuming energy costs decline and access to key production inputs, including ammonia and sulphur, improves. However, the outlook remains exposed to geopolitical developments, restrictions on fertiliser exports and potential disruptions to energy supplies, which could delay the anticipated decline in prices. Conversely, a faster reduction in tensions in the Gulf region could accelerate the recovery of fertiliser exports and place additional downward pressure on international prices.