MBF Group Urea and nitrogen fertilizers play a key role in agriculture and food security. The year 2025, however, brings exceptionally dynamic market changes that put pressure on both manufacturers and buyers. High raw material costs, supply constraints and geopolitical factors make fertilizers a strategic asset.
MBF Group SA has been trading in urea and fertilizers for several years – a listed company with an established position in the market, offering stable and flexible supply in a volatile economic environment. We welcome business partners, farmers and distributors who are looking for a reliable supplier in this challenging time.
High production costs and the role of natural gas
Nitrogen fertilizer production costs depend 60-80% on natural gas prices. Any increase in TTF quotes immediately translates into profitability for manufacturers, who are forced to reduce capacity or raise prices. As a result, in Europe, some plants are even opting for temporary shutdowns.
Such a situation reduces the competitiveness of European producers vis-à-vis the Middle East or the US, where gas is cheaper. For the EU, this means a permanent risk of import dependency and greater vulnerability to energy shocks.
Sanctions and duties on fertilizers from Russia and Belarus
As of July 1, 2025, the European Union has introduced tariffs on fertilizer from Russia and Belarus – initially 40-45 euros per ton, with a target of as much as 315-430 euros per ton in 2028. To this is added 6.5% of the value of imports, which in practice raises the cost of fertilizer by about. PLN 200 per ton. Vendors are shifting the entire burden to farmers.
The effect was immediately apparent – retail fertilizer prices in Poland rose by the equivalent of the introduced duty. In practice, this means a cost increase of more than 10-12% for popular nitrogen and compound fertilizers.
Fertilizer prices in Poland – immediate increases
The first increases were seen as early as July 2025. The most popular products, such as Polidap, Polyphoska, UAN and ammonium nitrate, have become more expensive by PLN 15-30 per ton. In May 2025. Urea was more than 37% more expensive year-on-year, and the overall fertilizer price index rose 23%.
Experts forecast further price increases of another 15-25 euros/ton in the second half of the year. The dynamics will depend on the level of tariffs, gas availability and global tenders.
Short-term and long-term effects on farmers
For Polish farms, tariffs and sanctions mean higher costs and less availability of fertilizers. In the short term, this can lead to a reduction in fertilization and thus a decrease in crop quality and quantity. This is especially true for smaller farms that have limited financial resources.
In the long term, the market is expected to stabilize with the strengthening of domestic and EU producers. Shield programs and subsidies can partially compensate farmers for higher costs, and the market will adjust to the new realities.
Global factors – Indian tenders and export restrictions
India remains the world’s largest importer of urea and its tenders involve huge volumes – up to 2 million tons at a time. Any such tender redirects global supplies to the Indian market, limiting availability for Europe. When the settlements coincide with the EU season, Poland will experience shortages of several weeks.
The situation is exacerbated by export restrictions in China and logistical problems in Iran and Egypt. Global urea supply is shrinking and prices are rising, especially in Q3 and Q4 2025.
Import and availability of urea in Poland
April 2025 data show that urea imports to Poland were more than half of what they were a year earlier. The trend shows no signs of improving, and the market is bracing for further shortages. Distributors warn of problems with product availability during the fall season.
The decline in supply can be seen despite periodic price cuts in March and April, which were only a temporary breather. In general, the direction of change is negative – less and less urea on the market and higher prices.
Price forecasts for the second half of 2025
In the second half of the year, urea prices in Europe are expected to remain in the $390-470/ton range. Increases will be driven by tariffs, Indian tenders, export restrictions and seasonal demand. If the logistical situation in the Red Sea tightens, or if there are further problems in Egypt, temporary jumps above these forks are possible.
For farmers and importers, this means the need for a flexible approach to purchasing and diversification of supply sources. Stabilization in the market may not come until 2026, with the launch of new production capacity in Asia.
Buyer strategies and adaptation
The best purchasing strategy becomes planning ahead and spreading purchases over several batches throughout the year. Diversification of supply sources – Egypt, Algeria, Nigeria or the US – minimizes the risk of shortages. Importers are also increasingly using alternative products such as UAN or ammonium nitrate.
Logistics security, fixed freight slots and transportation insurance are becoming an important part of trade negotiations. Only a comprehensive approach can reduce the effects of global fertilizer market volatility.
Summary and outlook
The urea and fertilizer market remains tight and volatile in the second half of 2025. The biggest factors are gas costs, EU sanctions, Indian tenders and export restrictions. On top of that, there are logistical factors that can exacerbate the situation at any time.
These challenges represent both a threat and an opportunity – for EU producers, they mean improved competitiveness, and for importers, the need for innovative trade solutions. Active risk management and flexibility in purchasing decisions will be key.
MBF Group SA, as an experienced listed entity, specializes in urea and fertilizer trading, providing partners with stability and professional support. We invite all interested parties – from farmers to distributors to large purchasing groups – to join us in building safe and profitable solutions in this challenging market environment.
