The global fertilizer market entered 2026 in a state of acute stress, already burdened by years of trade restrictions, export curbs, and energy volatility, when the outbreak of the US–Israel–Iran conflict on 28 February 2026 delivered the sharpest supply shock since the 2022 Ukraine crisis. The consequences reverberated across every fertilizer product class and every major importing nation.
Global Policy Landscape
Fertilizer trade has been shaped by an increasingly fragmented set of national policies.
- China, the world’s largest phosphate and nitrogen producer, imposed strict export quotas beginning in late 2023 to prioritize domestic food security and price stability. Phosphate exports were also curtailed partly to secure inputs for lithium-iron-phosphate batteries used in electric vehicles.
- In 2025, China resumed limited exports under a strict quota of 3.5–4 million MT beginning in May 2025. However, customs inspections delayed actual loadings, keeping global markets tight.
- In mid-March 2026, Beijing banned exports of nitrogen-potassium fertilizer blends and certain phosphate varieties such as Urea, Potassium Nitrate, Calcium Nitrate, Monoammonium Phosphate (12-61-0), and Potassium Sulfate.
- Russia and Belarus remained subject to EU sanctions and tariffs on nitrogen and potash fertilizers. Russia extended fertilizer export quotas until December 2026, covering:
- 8.7 million tonnes of nitrogen fertilizers
- Over 4.2 million tonnes of ammonium nitrate
- About 7 million tonnes of compound fertilizers
- Russia also suspended all ammonium nitrate exports from 21 March to 21 April 2026. In November 2025, Russia introduced a temporary ban on exports of technical sulphur, a critical fertilizer production input.
- India, the world’s largest fertilizer importer, continued heavy government subsidy programs and periodic tender cycles, acting as a major price-setter in global DAP and urea markets.
- The EU introduced the Carbon Border Adjustment Mechanism (CBAM) for carbon-intensive products, including fertilizers. Under CBAM:
- Importers must report embedded carbon emissions.
- Fertilizer exporters to Europe may need to purchase carbon certificates.
- The policy especially impacts high-emission fertilizer producers outside Europe.
- The European Commission proposed a one-year suspension of MFN import duties on several nitrogen-based fertilizers and production inputs, including ammonia and urea, through duty-free tariff rate quotas applicable to all countries except Russia and Belarus. The measure was framed as support for farmer costs and EU food security.
Commodity Price Snapshot (Pre-War Baseline, Late February 2026)
| Product | Price (Approx. Late Feb 2026) |
|---|---|
| Urea (Middle East) | ~USD 470–480/MT |
| DAP (Middle East) | ~USD 710–720/MT |
| Ammonia (Middle East) | ~USD 440–450/MT |
| Ammonium Nitrate (Russia) | ~USD 280–310/MT |
| Sulphur (Middle East) | ~USD 490–530/MT |
The War Shock
The conflict that erupted on 28 February 2026 immediately transformed a tight fertilizer market into a full-scale crisis. The blockage of the Strait of Hormuz, the world’s most critical maritime chokepoint, disrupted the transit of roughly 30–35% of global urea exports and 20–30% of ammonia exports.
Middle East Share in Global Export
- Urea – 40–41%
- Ammonia – 27–30%
- Sulphur – 17–19%
- Potash – 10–13%
- Rock Phosphate – 25–28%
Production Shutdowns
- QatarEnergy (QAFCO) — Qatar’s state-owned fertilizer producer, accounting for roughly 14% of global urea trade, halted LNG production on 2 March 2026, forcing ammonia and urea plants offline.
- Iran — Seven urea and ammonia plants shut down by early March due to fears of Israeli targeting.
- Malaysia — PETRONAS temporarily shut down its Bintulu urea plant in April 2026 due to technical issues.
- UAE, Saudi Arabia, and Jordan — Major fertilizer facilities across the Gulf reduced or suspended production due to attacks, insecurity, and energy supply disruptions.
- ADNOC’s Ruwais industrial complex, which includes fertilizer and chemical facilities, was temporarily affected after a drone strike in March 2026.
Price Consequences
The price shock was immediate and severe across the fertilizer market.
- Urea prices surged by over 44% within four weeks in March, marking the sharpest monthly increase and reaching the highest level observed in the past four years.
- DAP prices increased by approximately 9% in March compared to February.
- Ammonia prices surged as Gulf production collapsed and natural gas accounting for 80–90% of ammonia production costs became both costlier and scarcer.
- TSP and MAP 12-61 followed DAP’s trajectory, with tight supply from Chinese export restrictions compounding the Gulf disruption.
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