The price of urea fertiliser in Europe rose about 40% last month as a result of the conflict in the Middle East, according to a new report.

Overall fertiliser "affordability" has deteriorated since the closure of the Strait of Hormuz, according to the report published by Rabobank.

Analysts have warned that nitrogen markets are "the most exposed" and are forecast to see one of the steepest declines in demand this year.

Nitrogen fertiliser prices were already more than 20% higher at the start of 2026 than they were at the same period in 2025.

Phosphate markets are also under pressure, according to the Rabobank study, while potash prices are comparatively "more balanced".

Bruno Fonseca, farm inputs senior analyst with RaboResearch, believes that the global fertiliser market faces a "prolonged period of tight supply, weak affordability, and heightened price risk".

"Farmers are expected to trim application volumes in the current season and likely the next crop cycle as well," Fonseca said.

Fertiliser markets

According to the new Rabobank study, even if a peace agreement is signed to end the current Middle East conflict a return to normal fertiliser market dynamics "will be slow".

Analysts have also highlighted that Europe's import options for nitrogen products have become "increasingly constrained".

Algeria and Egypt are the primary suppliers of urea and ammonia to the EU but both are facing the challenge of gas availability and production constraints.

Russia has re-entered the European fertiliser market despite higher EU tariffs now in play but its export capacity is limited.

Meanwhile policymakers in the EU are now trying to ease fertiliser market pressures by proposing a temporary suspension of "most favoured nation" (MFN) duties on key nitrogen fertilisers and inputs - including ammonia and urea.

This would apply to all countries with the exception of Russia and Belarus.

However the EU's Carbon Border Adjustment Mechanism (CBAM) remains in force.

According to Rabobank, the outlook for 2026 points to "continued pressure" on farm economics and increased risks for global crop production and food price stability.