The Battle in Iran is Making Espresso Manufacturing Extra Costly

Fertilizer prices are skyrocketing for espresso producers, threatening future international provide and the livelihoods of smallholder farmers because the U.S-Iran conflict sends shocks by way of the power, transport and agricultural-input markets. 

World lenders, espresso trade analysts and producer representatives have issued latest warnings about rising enter prices, with potential threats to the 2026/27 espresso season ought to war-related disruptions drag on.

In its newest month-to-month market report, the Worldwide Espresso Group cited the battle within the Center East as the motive force of a 2.3% improve of the ICO Composite Indicator Worth, an trade benchmark. The group famous that the 2025/26 espresso crop is unlikely to be considerably affected, as a result of fertilizer has already been utilized typically, and that the better danger seems to be the 2026/27 crop. 

The warning comes as international fertilizer markets face their third main worth shock since 2020, following COVID-19-related disruptions and Russia’s conflict in Ukraine. The present shock is tied on to disruptions across the Strait of Hormuz, a key route for oil, pure gasoline and fertilizer commerce.

World Fertilizer and Power Costs

The World Financial institution final week projected that fertilizer costs will rise 31% in 2026, pushed by a 60% leap in urea, probably the most broadly used strong nitrogen fertilizer. Power costs are projected to rise 24%, with the financial institution warning that larger fertilizer prices may erode farmer incomes and threaten future crop yields.

“Rising commodity costs brought on by these shocks will improve inflation and dampen progress worldwide,” the group wrote, projecting that “70% of commodity importers and greater than 60% of commodity exporters worldwide may see weaker progress than was projected in January.”

Smallholder farmers are particularly uncovered to fertilizer shocks as a result of they have a tendency to bear probably the most worth danger with much less entry to credit score, insurance coverage or different monetary instruments. In Colombia, the place 96% of coffee-producing households farm lower than 5 hectares, fertilizer represents roughly one-fifth of manufacturing prices. Current USDA espresso reviews from El Salvador, Honduras, Indonesia and Tanzania equally level to fertilizer as a very unstable price variable amongst smallholder producers. 

Brazil, Colombia, Costa Rica and Honduras

In Brazil, the place analysts are predicting a document espresso crop in 2026/27 as a result of biennial cycle, restoration from climate harm and robusta progress, agricultural leaders are warning of price reverberations from the nation’s heavy reliance on imported inputs.

CEPEA, a analysis middle on the College of São Paulo, mentioned that of the 7.7 million tons of urea Brazil imported in 2025, 33% originated within the Center East.

“The will increase in gas and fertilizer costs ought to immediately affect producer profitability, since, not like the commercial and repair sectors, the agricultural sector is a worth taker and can’t proportionally move on these will increase in manufacturing and freight prices to its gross sales costs,” the evaluation said (translated from Portuguese). “Even so, the results of worth will increase on the buyer shall be felt, regardless of the drop in producer profitability.”

Colombian Espresso Growers Federation (FNC) CEO Germán Bohamón mentioned the battle within the Center East has already pushed imported urea costs from $414 to $750 per metric ton. In an editorial within the Colombian information supply La República, Bohamón mentioned the rise could have direct results on espresso farmers as fertilizer accounts for 18% to twenty% of the price of parchment espresso manufacturing.

In Costa Rica, the Instituto del Café de Costa Rica (ICAFE) warned of a doable “tormenta perfecta” for the 2026-2027 harvest, based on El País. ICAFE Govt Director Gustavo Jiménez mentioned the sector is in a “fragile” and sophisticated state of affairs, with larger fertilizer costs including to forex pressures, local weather danger and declining numbers of producers and staff.

In Honduras, the USDA Overseas Agricultural Service final week mentioned the sector faces rising manufacturing prices, together with larger diesel costs and fertilizer-supply uncertainty linked to the “Persian Gulf battle.”

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