Farm input price inflation has been an ongoing theme in 2025, and elevated prices look set to persist for many key fertilisers. RaboResearch agriculture analyst Paul Joules said against the backdrop of some key commodities – such as wheat, barley and cotton – trending downwards, this is creating margin pressure for farmers. “Due to elevated fertiliser prices globally, demand is beginning to pull back, and RaboResearch notes this could help to prevent further upside for some fertiliser prices,” he said.

Although urea prices have eased from their peak, Mr Joules said, they remain 5% more expensive than at the start of the year, in Australian dollar terms. “The 12-day conflict between Iran and Israel initially sparked concerns over global urea supply, as 45% of the world’s exports originate from that region. Fortunately, a ceasefire has held.”

Despite this, Mr Joules said, prices remain elevated – due primarily to tight global supply and strong demand from India. “Until Indian demand eases, urea prices are likely to stay high, and – given inventories in India are still relatively low – we’re unlikely to see much of a pullback in demand in the near term.”

“One positive on the urea front is the return of Chinese urea exports, following a one-and-a-half-year absence from normal export volumes,” he said. “These volumes, in theory, should help to ease the tight global supply situation. However, Indian import demand could more than offset the improving supply picture.”

The Rabobank analyst said phosphate prices have surged 25% year-to-date in 2025, driven by tight global supply and rising production costs. “These elevated costs have made phosphate production more expensive,” he said. “However, with prices already high, global demand is expected to soften, likely capping further price increases in the near term.”

Mr Joules said the other positive is recent data shows Chinese phosphate production is on the rise. “Depending on export policy, this could eventually help to alleviate the tight supply issue.”

“Potash prices have risen 13% year-to-date in Australian-dollar terms, supported largely by strong demand from Brazil earlier in the year. While this demand has underpinned the market in 2025, we are now beginning to see more limited buying from the nation. And this may potentially offer some price relief going forward,” he said.

The other good news from a potash perspective is that the all-important Indian market looks well supplied, following a period of strong buying, Mr Joules said. “This means this key fertiliser-buying nation is unlikely to come back to the global market in the short-term to secure large volumes, given ample inventories.”

He said, “although we haven’t seen many signs of downside on the fertiliser front, one positive is that many agrochemical prices in China have remained below 2024 levels throughout 2025”. “However, the modest price reductions may take time to flow through to the Australian market, as existing inventories need to be worked through.”

Containerised shipping rates – highly volatile over the past year – could also influence retail prices, Mr Joules said. “Year-to-date, these rates have declined by 41%, which may support lower agrochemical prices moving forward.”

“Looking ahead,” he said, “we expect the Australian dollar to have a big impact on pricing, given Australia’s high reliance on imports for farm inputs. Over the next 12 months, RaboResearch expects to see a modest increase in the AUD/USD cross, to reach USD 0.68. This has potential to provide modest relief for fertiliser, although the tight global supply picture will likely limit major downside.”

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