Ireland’s fertiliser market is experiencing a severe and sustained price shock driven by two compounding forces in 2026. The outbreak of the US-Isreal-Iran war on 28th February 2026 and the resulting effective closure of the Strait of Hormuz, and the full implementation of the EU Carbon Border Adjustment Mechanism (CBAM) from 1st January 2026 have driven costs to levels not seen since the 2022 peak. Ireland, which imports approximately 1.4–1.7 million tonnes of fertiliser annually and has no domestic production, is entirely exposed to both.
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Current prices
CSO data confirms Irish fertiliser prices were already rising, up 11.6% year-on-year to January 2026 before the war began. By March 2026, the CSO Agricultural Input Price Index rose a further 12% in a single month and 17% year-on-year. At Irish merchant level, straight urea reached approximately €800/tonne and protected urea approximately €850/tonne in March 2026, with CAN at €510–520/tonne and compounds at €610–650/tonne. Globally, urea averaged $725/tonne in March 2026, the highest level since April 2022. Physical market tenders by the Egyptian producer NCIC in early May 2026 recorded granular urea at up to $865/tonne and DAP at $915–917/tonne, illustrating the premium commanded by non-Hormuz supply routes
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Strait of Hormuz disruption
The Strait handles approximately 30–35% of globally traded fertilisers, including close to half of global urea exports, as well as 20% of global LNG - the critical feedstock for nitrogen fertiliser production. The World Bank’s April 2026 Commodity Markets Outlook (CMO), the most authoritative independent assessment available, characterises the associated oil supply shock as the largest on record. European natural gas prices (the primary input for nitrogen fertiliser) rose approximately 60% in March 2026 alone. The World Bank projects the global fertiliser price index to rise 30.7% in 2026, led by a 59.7% increase in urea prices year-on-year to a 2026 average of $675/tonne. Natural gas in Europe is forecast to average $15/MMBtu in 2026 (up 25%) before declining to $12/MMBtu in 2027, in 2020 the average price was $3.20/MMBtu All World Bank projections assume the most acute phase of disruptions ends approximately May 2026, with Hormuz traffic normalising by October. Risks are described as “tilted firmly to the upside.”
Carbon Border Adjustment Mechanism (CBAM)
CBAM entered its definitive phase on 1st January 2026, applying a carbon levy to fertiliser imports from non-EU producers. With 80% of Ireland’s urea sourced outside the EU, the sector is disproportionately exposed. CBAM on non-EU CAN has been quoted at €115–130/tonne from March 2026. Anticipating the levy, Irish importers significantly front-loaded purchases in late 2025: nitrogenous fertiliser imports into Ireland in Q4 2025 were two-thirds above the five-year quarterly average, and EU-wide nitrogen imports rose 45% above the same benchmark. This pre-loading provided a partial buffer through the early months of 2026, but as Ifac’s head of economics Karol Kissane confirmed in April 2026, “these stocks will be sold out soon”, after which all newly imported fertiliser will carry the CBAM levy on top of elevated global market prices. January 2026 nitrogen imports collapsed by approximately 90% versus the five-year average, confirming the exhaustion of pre-CBAM stock as the sole near-term supply source. Looking toward H1 2027, CBAM represents a permanent structural cost floor: Copa-Cogeca estimates the mechanism will cost EU farmers more than €900 million in 2026 alone, rising to €12 billion over seven years. Unlike the Hormuz shock, which may ease as geopolitical conditions normalise, CBAM is a policy instrument that does not recede and will prevent fertiliser prices from returning to pre-2022 levels even under a fully normalised energy and logistics environment.
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Duration outlook
The World Bank CMO’s Special Focus chapter analyses 40 years of geopolitical oil supply shocks and finds empirically that fertiliser price responses peak at approximately 12 months after the initial shock and remain above pre-shock levels for more than two years. Structural factors reinforcing this duration include European gas storage refilling demand, confirmed infrastructure damage to Qatar’s Ras Laffan LNG facility (parts of which are expected to remain offline in 2027), and production restart friction at fertiliser plants. The World Bank’s baseline projects the fertiliser price index at 152 in 2027 — still materially above the 2024 level of 117.6. Under an extended disruption scenario, the CMO indicates urea could exceed $700/tonne for 2026 as a whole.
Food price implications
Transmission from fertiliser costs to consumer prices takes three to six months and operates through farm input costs, farm gate prices and supply chain contract renegotiation. Ireland’s grass-based dairy and beef systems are among the most nitrogen-intensive in Europe. Our Head of Public Sector & Economics, Karol Kissane, has warned that if the current shock transmits as the 2022 episode did, Irish food prices could reach 50% above pre-2022 levels. TD Economics projects fertiliser shortages from the spring 2026 planting season will push food prices higher well into 2027. Retail grocery inflation this year for Irish households of 8–10% has been projected by independent analysts. The World Bank projects global food prices to increase approximately 2% in 2026, with risks to the upside, and notes that high fertiliser prices may reduce application rates with “a long tail, materialising as reduced crop yields in future growing seasons.”
| Indicator | Current / 2026f | 2027f (WB baseline) |
|---|---|---|
| Global urea price (World Bank forecast) | $675/t (+59.7% y/y) | $500/t (−25.9%) |
| Fertiliser price index (2010=100) | 181 (+30.7% y/y) | 152 (−16.1%) |
| European gas TTF (World Bank forecast) | $15/MMBtu (+25%) | $12/MMBtu (−20%) |
| Irish urea retail (March 2026 actual) | €800/t (est. +55–60%) | No verified data |
| Irish CAN retail (March 2026 actual) | €510–520/t | No verified data |
| CBAM levy on non-EU CAN (2026) | €115–130/t (est.) | Permanent / rising |
| Brent crude oil (World Bank forecast) | $86/barrel (baseline) | $70/barrel |
Sources: World Bank CMO April 2026 (Table 1); Irish Farmers Journal (March 2026); CSO Agricultural Input Price Index (May 2026); ICOS (May 2026); Ifac (April 2026); Argus Media (May 2026). All 2026 and 2027 figures marked as forecast (f) are World Bank projections under the baseline scenario.
The central conclusion of this analysis is that Irish fertiliser prices will remain significantly elevated through 2026 and into H1 2027 under any plausible scenario. CBAM has permanently raised the structural cost floor for non-EU fertiliser imports regardless of geopolitical developments. The Hormuz shock has added an acute and severe further layer that, based on 40 years of historical precedent analysed by the World Bank, takes more than two years to fully work through commodity markets. Irish farmers, agri-merchants and food businesses should plan for input costs to remain elevated through at least mid-2027, and consider how that feeds into budgeting and cash flow planning for the year ahead..
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