The gas price currently plays virtually no role in fertilizer pricing. It's primarily the urea price that drives the market. Globally, urea prices are currently high. Prices of around $500 per tonne are now being reported from North African export regions.
Since the beginning of 2026, the gas price has risen sharply, peaking on January 30th at its highest level since the end of June last year. From early February onwards, the gas price has fallen sharply again, but in both cases, there was no clear reaction to fertilizer prices. Consequently, the fertilizer market is reacting differently to gas price developments than before. Under current market conditions, fertilizer pricing is primarily determined by urea, no longer by the gas price as the main cost item.
Cautious imports put pressure on supply
Importers are currently taking few long positions and are postponing purchases as long as possible. Due to the ongoing uncertainty surrounding the Carbon Border Adjustment Mechanism (CBAM) and existing sanctions on Russian products, among others, the import risk is difficult to manage. While Europe normally imports around 2 to 2,2 million tons of urea, that volume is now clearly lagging behind. This shortage must be absorbed elsewhere in the market and is driving up prices, according to market participants.
This makes the fertilizer market less cost-driven than before and more dependent on demand and availability. This makes the situation different from usual. Prices are less responsive to input costs and more responsive to trade flows and purchasing behavior, making the market more volatile and difficult to predict.
A key explanation lies with the Carbon Border Adjustment Mechanism (CBAM), which took effect on January 1, 2026. The CO2 import levy imposes an additional cost on imported fertilizer of (as far as is currently known) approximately €40 to €60 per tonne. Combined with sanctions on Russian products, this has effectively created a substantial import barrier. European producers benefit from this and have more leeway to maintain prices. This explains why the gas price will not automatically become the leading price again for the time being. As long as urea remains at a high level, pricing will remain largely decoupled from gas.
Further price pressure for agricultural entrepreneurs
For farmers, this means further price pressure. With the new growing season approaching and urea prices at a high level, fertilizer experts see little room for a rapid price drop. Only if manufacturers struggle to sell their stock could this lead to some price relief.