Fertilizer are skyrocketing for coffee producers, threatening future global supply and the livelihoods of smallholder farmers as the U.S-Iran war sends shocks through the energy, shipping and agricultural-input markets.
Global lenders, coffee industry analysts and producer representatives have issued recent warnings about rising input costs, with potential threats to the 2026/27 coffee season should war-related disruptions drag on.
In its latest monthly market report, the International Coffee Organization cited the conflict in the Middle East as the driver of a 2.3% increase of the ICO Composite Indicator Price, an industry benchmark. The group noted that the 2025/26 coffee crop is unlikely to be significantly affected, because fertilizer has already been applied in most cases, and that the greater risk appears to be the 2026/27 crop.
The warning comes as global fertilizer markets face their third major price shock since 2020, following COVID-19-related disruptions and Russia’s war in Ukraine. The current shock is tied directly to disruptions around the Strait of Hormuz, a key route for oil, natural gas and fertilizer trade.
Global Fertilizer and Energy Prices
The World Bank last week projected that fertilizer prices will rise 31% in 2026, driven by a 60% jump in urea, the most widely used solid nitrogen fertilizer. Energy prices are projected to rise 24%, with the bank warning that higher fertilizer costs could erode farmer incomes and threaten future crop yields.
“Rising commodity prices caused by these shocks will increase inflation and dampen growth worldwide,” the group wrote, projecting that “70% of commodity importers and more than 60% of commodity exporters worldwide could see weaker growth than was projected in January.”
Smallholder farmers are especially exposed to fertilizer shocks because they tend to bear the most price risk with less access to credit, insurance or other financial tools. In Colombia, where 96% of coffee-producing families farm less than five hectares, fertilizer represents roughly one-fifth of production costs. Recent USDA coffee reports from El Salvador, Honduras, Indonesia and Tanzania similarly point to fertilizer as a particularly volatile cost variable among smallholder producers.
Brazil, Colombia, Costa Rica and Honduras
In Brazil, where analysts are predicting a record coffee crop in 2026/27 due to the biennial cycle, recovery from weather damage and robusta growth, agricultural leaders are warning of cost reverberations from the country’s heavy reliance on imported inputs.
CEPEA, a research center at the University of São Paulo, said that of the 7.7 million tons of urea Brazil imported in 2025, 33% originated in the Middle East.
“The increases in fuel and fertilizer prices should directly impact producer profitability, since, unlike the industrial and service sectors, the agricultural sector is a price taker and cannot proportionally pass on these increases in production and freight costs to its sales prices,” the analysis stated (translated from Portuguese). “Even so, the effects of price increases on the consumer will be felt, despite the drop in producer profitability.”
Colombian Coffee Growers Federation (FNC) CEO Germán Bohamón said the conflict in the Middle East has already driven imported urea prices from $414 to $750 per metric ton. In an editorial in the Colombian news source La República, Bohamón said the increase will have direct effects on coffee farmers as fertilizer accounts for 18% to 20% of the cost of parchment coffee production.
In Costa Rica, the Instituto del Café de Costa Rica (ICAFE) warned of a possible “tormenta perfecta” for the 2026-2027 harvest, according to El País. ICAFE Executive Director Gustavo Jiménez said the sector is in a “fragile” and complex situation, with higher fertilizer prices adding to currency pressures, climate risk and declining numbers of producers and workers.
In Honduras, the USDA Foreign Agricultural Service last week said the sector faces rising production costs, including higher diesel prices and fertilizer-supply uncertainty linked to the “Persian Gulf conflict.”
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Nick Brown
Nick Brown is the editor of Daily Coffee News by Roast Magazine.
