LatAm Agribusiness "Chart of the week: Urea prices are back to pre-confl..."

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LatAm Agribusiness "Chart of the week: Urea prices are back to pre-confl..."

Global Research

18 June 2026ab

LatAm Agribusiness Equities

AmericasChart of the week: Urea prices are back to

pre-conflict levels Energy

Matheus Enfeldt

Analyst

matheus.enfeldt@ubs.com

Urea price drops further after peace deal +55-11-2767 6975

Following the signing of the US-Iran peace deal, urea prices have returned to pre- Victor Modanese

conflict levels. The front-month Urea (Granular) FOB Middle East contract is at US Associate Analyst

$448/ton, vs US$484/ton immediately before the conflict started, and down -48% victor.modanese@ubs.com

from the US$858/ton April peak. As per UBS' US Chems team, this decline reflects +55-11-2767 6008

the market moving past seasonal tightness from the Northern Hemisphere crops. A

more bearish outcome from the Indian tender and the resumption of Chinese export

quotas also weighed on pricing.

The base case remains that structurally tight supply will support pricing at a

premium to the cost curve in 2H26/2027, but more moderate than previous

expectations. Still, physical flows from the ME will take several months to improve,

even if the peace agreement is effective, and delayed demand now could add

upside risks in the latter part of the year (read "Fun with Fertilizers").

Lower urea prices imply that ag input cost pressures for Brazilian farmers in 2026/27

could be softer than previously anticipated, particularly for corn and cotton. This

reduces the downside risk to technology adoption and area expansion in Brazil

agribusiness relative to our earlier expectations.

Previously, assuming urea costs during Brazil acquisition window up +25% YoY and

based on IMEA estimates for other costs, we calculated soybean unitary costs would