Fertilizer costs jump 20–30% across coffee origins as Strait of Hormuz disruptions squeeze growers

Coffee growers from Central America to East Africa are absorbing fertilizer cost increases of 20 to 30 percent driven largely by shipping disruptions through the Strait of Hormuz, according to a batch of USDA Foreign Agricultural Service annual reports released May 20, 2026, covering Vietnam, Uganda, Peru, Nicaragua, Ethiopia, Costa Rica and Colombia.

The reports, prepared by FAS posts in each country, paint a consistent picture for the fertilizer trade: input affordability is now the dominant production risk across the global coffee belt. Higher nutrient and fuel prices are colliding with a forecast El Niño and softening green-coffee prices, threatening the profitability of millions of smallholders who drive demand for nitrogen, phosphate and complex fertilizers in these regions.

Strait of Hormuz disruption reaches the coffee farmgate

FAS Managua reported that fertilizer prices in Nicaragua rose 25 percent in the first half of 2026, attributing the increase directly to global shipping disruptions in the Strait of Hormuz. The post noted that some agricultural distributors have begun restricting fertilizer sales or requiring advance payment, tightening access for small and medium growers.

The same conflict-linked logistics squeeze appears elsewhere. In Ethiopia, FAS Addis Ababa said the closure and disruption of the Strait of Hormuz reduced vessel calls at the Port of Djibouti and triggered fuel shortages, with exporters reporting operational costs per container up 60 percent year-on-year. FAS Bogotá tied rising Colombian fertilizer costs to the Middle East conflict, while FAS San José flagged higher fertilizer prices as one of several headwinds facing Costa Rican producers.

For nitrogen and phosphate suppliers, the data points to a clear demand-side strain. Uganda’s report noted that prices for commonly used nitrogen- and phosphorus-based fertilizers rose roughly 21 percent for a 50-kg bag, constraining broader uptake in a market where fertilizer use remains low. In Vietnam, FAS Ho Chi Minh City said fertilizer and fuel costs climbed approximately 30 percent and labor 33 percent over the prior year.

Fertilizer’s weight in the cost structure

The reports quantify how exposed coffee economics are to input prices. In Peru, fertilizers account for 24 percent of total production costs, second only to labor at 58 percent, FAS Lima reported. In Colombia, inputs and fertilizers make up about 25 percent of the cost structure, with labor at 69 percent, according to data from the Colombian Coffee Growers Federation (Fedecafé) cited in the report.

That weighting matters because growers cannot easily cut back. Fedecafé is advising producers to maintain proper fertilization specifically because well-nourished plants better withstand the drought stress expected from El Niño. Costa Rica’s ICAFE warned the opposite risk: that higher fertilizer prices, compounded by a colón that has appreciated roughly 35 percent since mid-2022, may leave many producers unable to fertilize plantations adequately.

El Niño raises the stakes for the 2026/27 crop

Several posts cited a NOAA forecast putting the probability of El Niño conditions emerging in mid-2026 at 62 percent. The phenomenon typically brings drier conditions to Southeast Asia and Central America, raising the risk of reduced yields in Vietnam and Nicaragua. Nicaragua’s projected MY 2026/27 output of 2.4 million bags would sit 8 percent below historical highs, with drought and input costs cited as the main drags.

Colombia offers a counterpoint. FAS Bogotá forecast a 7.2 percent production increase to 13.4 million bags, noting that coffee historically performs better under El Niño than La Niña when soils retain moisture, provided plants are properly nourished, again underscoring the fertilizer link.

Margins thin even as prices stay elevated

The squeeze is unfolding even though prices remain elevated by historical standards. Vietnamese export prices averaged $5,127 per ton in the first half of MY 2025/26, down 9 percent year-on-year but still well above MY 2023/24 levels. Nicaragua and Ethiopia both flagged Brazil’s projected 23 percent jump in Arabica output as a threat that could create the largest surplus in five years and pull prices lower, with one Nicaraguan industry estimate pointing to a potential 35 percent decline.

For fertilizer suppliers, the watchpoints are clear: whether Hormuz-related freight pressure eases, how far green-coffee prices fall against still-high input costs, and whether smallholders in low-uptake markets like Uganda continue adopting fertilizer or retreat. A December 2026 EU Deforestation Regulation deadline adds a further compliance-cost layer across all seven origins.

Source: USDA Foreign Agricultural Service