Phosphate fertilizers take the Lead
The global fertilizer market in 2025 has been experiencing renewed price strength, with Triple Superphosphate (TSP) and Diammonium Phosphate (DAP) emerging as key contributors. According to the World Bank’s fertilizer price index, there was an increase in TSP and DAP of 43% and 23%, respectively. Strong agricultural demand, restricted trade flows, for example China export restrictions, Belarus and Russia sanctions, and Belarus and Russia tariffs, and uneven production levels have created upward pressure on phosphate fertilizer prices worldwide.
Growing Agricultural Demand and Balanced Nutrient Use
Agricultural expansion and the push for higher crop productivity have kept fertilizer demand firm throughout 2025. Developing economies such as India, Brazil, and several African nations have shown notable growth in fertilizer application, supported by favorable government policies and an increased focus on nutrient balance. According to the World Bank, the global fertilizer-price index rose by roughly 15% in the first half of 2025, with phosphate-based fertilizers leading the rally. DAP prices climbed by more than 20%, while TSP recorded a gain of over 40% compared to the previous year. The steady demand for phosphate nutrients has been met with constrained supply, amplifying market tightness.
Phosphates Remain Core to Global Crop Nutrition
Phosphate fertilizers are vital for plant root growth and early crop development. DAP (18-46) and TSP (0-46) are widely used to meet phosphorus needs in cereal and oilseed crops, particularly in regions with low soil phosphorus content.
Unlike nitrogen-based fertilizers, phosphate products have limited substitutes, meaning any imbalance in production or trade quickly affects prices. This limited flexibility in supply chains has been a key driver of price volatility in 2025.
Production Challenges and Export Controls Tighten Supply
The global phosphate market has faced a series of disruptions on the supply side. China, one of the top exporters of phosphate fertilizers, maintained export limitations through early 2025 to prioritize domestic demand. The restrictions led to a sharp drop in available export volumes, tightening supply in major import destinations such as India, Pakistan,
and Southeast Asia. In addition, Belarus, primarily a leading exporter of potash fertilizers, continues to be impacted by stringent trade restrictions imposed by the European Union.
In 2025, the EU introduced a phased tariff regime targeting the remaining agricultural imports from Belarus and Russia, including nitrogen-based fertilizers. These tariffs, which began implementation on July 1, 2025, include an additional charge of €40 to €45 per tonne on relevant fertilizers, complementing the existing 6.5% duty.
Simultaneously, trade sanctions and logistical bottlenecks affecting Russian and Belarusian fertilizer exports have complicated procurement for European and American buyers. Although OCP (Morocco) and Ma’aden (Saudi Arabia) have stepped in to increase supply, the ramp-up of new capacities remains gradual, leaving the global market
undersupplied.
Rising input costs add to the pressure
The cost of raw materials used in phosphate fertilizer production phosphate rock, sulfur, and ammonia has continued to rise in 2025. Sulfur prices, in particular, increased by nearly 30% year-on-year, owing to reduced refinery output and freight constraints. High feedstock costs have narrowed producer margins and raised the cost floor for finished
fertilizers. Large integrated producers in North Africa and the Middle East have been able to maintain stable operations, but smaller manufacturers in Asia have faced cost pressures, forcing price increases in the export market.
Demand Centers shape market trends
India continues to dominate global DAP imports, accounting for more than 4.5 million tonnes annually. Despite incremental increases in domestic output, the country’s production capacity remains well below its consumption needs. Consequently, any disruption in global supply immediately affects local prices and availability. In Brazil, sustained demand for soybeans and corn has driven phosphate consumption to record levels.
Farmers are increasingly applying DAP and TSP to enhance soil health. Meanwhile, in Sub-Saharan Africa, countries like Ethiopia, Nigeria, and Kenya have accelerated fertilizer imports under agricultural productivity initiatives. Large tenders issued in early 2025 have further tightened regional supply.
Impact on affordability and Government Intervention
High fertilizer prices have raised concerns over affordability and farm-level economics. The fertilizer-to-crop price ratio, a key measure of input cost viability, has weakened compared to 2024. This imbalance poses challenges for small-scale farmers, particularly in emerging markets where government subsidies play a vital role. To stabilize domestic markets, countries such as India have revised fertilizer subsidy allocations and entered into long-term supply agreements with key global producers like OCP and Ma’aden. Similar strategies are being adopted in Latin America, where import diversification and regional blending initiatives aim to cushion the impact of high prices.
Phosphate Prices Set to Hold Firm Through 2026
The fertilizer price index is projected to rise by around 7% in 2025 as global demand strengthens, before stabilizing in 2026. Market conditions are expected to remain tight throughout 2025, particularly for urea, with prices forecast to increase by 15% before easing by 4% in 2026 as new production capacity is added in East Asia and the Middle East.
The outlook assumes that Russia’s fertilizer exports will continue shifting from Europe toward Brazil and India. However, additional trade restrictions, supply disruptions, or surges in ammonia and natural gas prices could drive DAP prices even higher. Meanwhile, MOP prices are expected to rise by about 5% in 2025, supported by firm demand, and then stabilize in 2026.
Phosphate fertilizer prices are also likely to remain elevated through most of 2025, driven by robust demand and constrained export volumes. Seasonal factors will also influence short-term pricing trends. The Indian kharif season
and South American planting cycle in the latter half of 2025 are likely to sustain the firm demand environment. Some moderation in prices may occur by 2026, provided that new capacity additions in Saudi Arabia, Morocco, and China.
Over the next decade, the global fertilizer industry is expected to enter a phase of structural change. The fertilizer market, valued at around USD 180 billion in 2024. Population growth, shrinking arable land, and the need for higher agricultural yields will ensure steady demand for phosphate-based fertilizers. However, environmental regulations, energy cost fluctuations, and raw material concentration in limited geographies will continue to shape supply dynamics and pricing trends.