Affordability ratios

Affordability ratios denote the relationship between fertiliser prices and benchmark agricultural commodity prices (maize, soya, wheat). This economic indicator largely governs the intensity of fertiliser use by growers, alongside cultivated area and yield requirements. When the ratio deteriorates — fertilisers becoming relatively more expensive compared with crops — farmers postpone or curtail first the application of the most price-sensitive nutrients, phosphorus and potassium, whilst nitrogen, an essential nutrient for plant growth, sees more restrained adjustments^[1].

Demand drivers and nutrient elasticity

Price responsiveness varies considerably across fertiliser nutrients. Nitrogen exhibits the lowest price elasticity: its irreplaceable role in plant nutrition restricts the scope for reducing application rates^[1]. By contrast, phosphorus and potassium react more sharply to affordability pressures; recent periods have demonstrated that farmers rapidly adjust their consumption of these two nutrients when prices climb^[1]. This hierarchy of behaviour creates inter-nutrient substitution effects: when fertilisers become costly, growers may favour certain nutrients at the expense of more affordable inputs such as potash, generating cross-impacts even for products not directly affected by supply disruption^[1].

Implications for global phosphorus use

Affordability constraints have triggered a marked contraction in P₂O₅ consumption worldwide. Between 2020/21 and 2025/26, global phosphorus use fell by 4% from a historical peak^[2]. Nearly all regions reduced their applications, including South Asia, which has not returned to its previous level. Only two geographical areas bucked this trend: China, self-sufficient in phosphorus and restricting exports, and Africa, where growth is driven by North Africa but has also materialised in sub-Saharan Africa^[2].

Field-level economic calculation and profit optimisation

At farm level, the decision to apply external nutrients rests on an economic assessment incorporating the fertiliser-to-crop price ratio, yield expectations, storage possibilities, market security and credit access^[3]. The economic optimum corresponds to the point where the marginal cost of fertiliser equals the marginal revenue from the additional harvest^[4]. The value/cost ratio (VCR) serves as a common decision criterion: a threshold of 2:1, meaning at least double the cost of fertiliser in return, is generally considered attractive by farmers^[4]. However, absolute net income matters equally: at low application rates, the VCR may be high without generating sufficient gain to motivate investment^[4].

Regional contexts and structural constraints

Smallholders in arid zones, with limited resources, prioritise short-term results and struggle to adopt integrated nutrient management practices whose benefits in terms of nitrogen use efficiency only emerge after several growing seasons^[3]. In India, the world's third-largest fertiliser consumer, the historical macro-level N-P-K application ratio stood at 1:0.5:0.25, reflecting the emphasis placed on nitrogen and qualitative soil deficiencies; this ratio corresponds neither to crop uptake nor to nutrient exports with harvest, which amount to 1:0.45:1.75^[5]. Asia accounted for 57% of global nitrogen consumption in 2020, with roughly two-thirds split between China (23.7 Mt) and India (20.4 Mt), whilst Africa totalled merely 4.4 Mt, or 4% of the global total^[6].

Supply disruptions and recent volatility

The disruption in the Strait of Hormuz immediately affected nitrogen affordability, whilst that of phosphorus deteriorated from already inadequate levels^[1]. These geopolitical tensions illustrate the vulnerability of fertiliser trade flows to maritime congestion and their propagation to markets not directly exposed, through farmers' inter-nutrient arbitrage^[1].