Fertiliser markets unsettled as UK suppliers stock up

UK fertiliser markets have been disrupted by logistical challenges and a lull in demand, creating a fractured and uncertain trading landscape into next year.

The introduction of the Carbon Border Adjustment Mechanism (Cbam) in the EU from 1 January 2026 will put a carbon tax on imports of fertiliser entering the trading bloc.

This has led to a flurry of imports coming to the UK from the EU in recent months as suppliers and distributors scramble to stock up ahead of the deadline.

See also: UK wheat growers pinched by inflation and flatlining yields

However, traders at Frontier say reduced demand from growers and co-operatives has created a knock-on effect within the supply chain, with congestion at storage facilities.

The merchant has advised growers to look at requirements while the market remains relatively quiet.

RaboResearch, the knowledge arm of multinational agricultural banking group Rabobank, says the EU Cbam will impose a carbon tax on approximately 15m tonnes of nitrogen-containing fertiliser imports annually, and expects European prices to rise as a result.

The UK’s own Cbam requirements are due to be implemented from 1 January 2027, with the government due to legislate it in the upcoming Finance Bill, scheduled for a second reading on 16 December.

Fertiliser markets

Prices collected by AHDB indicate that granular urea dropped back during the autumn, from £460/t in July to £417/t in October, based on a full load delivered in bags to farm on standard 28-day payment terms.

Industry sources suggest that granular urea prices remain in a similar range for December.

Meanwhile, ammonium nitrate has crept up towards £400/t.

Fertiliser manufacturer CF Fertilisers UK, a subsidiary of CF Industries, has reportedly already sold out for January delivery, with prices forecast to rise in February in line with demand.

CF Industries expects continued strong global nitrogen demand to the end of 2025 and into 2026, according to its most recent trading update.

However, Bruno Fonseca, senior farm inputs analyst at RaboResearch, said: “While there is a case to be made for prices to be well-supported from current levels, record production in major production areas such as Brazil and the US is overwhelming the market with supply.

“This will keep prices depressed in the short-to-medium term.

“Challenging profitability in the grain and oilseed sector portends poor fertiliser affordability and potential decline in fertiliser use in the coming year.”