1) Price and cost trends (since calendar week 3 2026)
Price-supporting factors
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The EU Carbon Border Adjustment Mechanism (CBAM) came into force on January 1, 2026. Market participants report that this is already having a price-supporting effect on imported fertilizers because additional carbon dioxide costs are being priced in - even if many details on cost distribution are still unclear.
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Import dependency and costs: Import prices for nitrogen and ammonia products are structurally higher as CBAM effects and existing EU tariffs continue to impact Russian and Belarusian fertilizers respectively.
Regulatory adjustments
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Due to the market reaction, the EU Commission is considering temporarily suspending or adjusting the CBAM levy for fertilizers if significant negative market effects are observed. These options could have a price-dampening effect, at least in the short term.
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France and Italy are calling for exemptions or deferral of CBAM costs for fertilizer imports in order to reduce high cost and competitive pressure on European farmers.
Operating costs & affordability
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Studies show that the share of fertilizer costs in total input costs for farmers is growing again ("affordability index"), which can have a price-dampening effect on demand.
2) Demand, supply & forecasts
Development of demand
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Regionally, demand could be somewhat weaker in parts of Europe, as higher input costs lead to reduced use, especially for nitrogen fertilizers. This pattern has already been described for 2025 and is likely to continue in 2026.
Supply side
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Trade flows shift due to CBAM and tariffs: Some exporters reduce deliveries to the EU, which may put pressure on local supply chains or import costs.
Long-term market structure
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Market analyses forecast a market volume of around USD 58 to 79 billion for Europe in 2026, depending on source and methodology, with moderate growth due to eco-schemes, increased specialty fertilizers and precision fertilization.
3) Bullish vs. bearish since week 3 2026
Bullish signals (upside risks)
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CBAM introduction: Supports prices for imports and strengthens the relative competitive position of local EU producers
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Regulatory uncertainties: Delays or changes in CBAM rules lead to precautionary purchases / increased stockpiling.
Bearish signals (downside/stabilization risks)
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Political attempts to temporarily ease CBAM costs could have a price-dampening effect.
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Supply side: If global prices stabilize or new capacities come online, import-side pressure could decrease.
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Demand limited by high input costs and declining affordability.
