Global Fertilizer Market Weekly Update (CW17)

I. Sulfuric Acid Export Rumors and Price Impact: Implications for Phosphate Fertilizer Costs

Prices of sulfur and sulfuric acid continue to rise, placing significant cost pressure on phosphate fertilizer producers, as these materials are core inputs in production.

Market rumors suggest that China may suspend sulfuric acid exports starting in May.

Some producers have reportedly received notifications, with the restriction potentially covering sulfuric acid generated as a by-product of copper and zinc smelting. Although no official announcement has been released, this move reflects a clear policy priority: ensuring domestic supply stability and prioritizing raw materials for local industries.

As the world’s largest producer and supplier of sulfuric acid - accounting for over 40% of global output - China exported approximately 4.65 million tons in 2025, with over 70% shipped between May and December.

The surge in sulfuric acid prices is driven by three main factors:

• Rising upstream raw material costs

• Tightened supply

• Strong downstream demand

These factors are directly pushing up production costs for downstream industries, leading to a sharp increase in global fertilizer prices. Some analysts estimate that phosphate fertilizer prices could rise by more than 50%, raising concerns about global food production.

Although fertilizer prices in China remain relatively low compared to global levels, many domestic producers are still facing significant cost pressure. If the export restriction is implemented, it may stabilize domestic supply; however, the high-cost structure of phosphate fertilizers is unlikely to ease in the short term.

II. Strong Growth in China’s Fertilizer Trade in Q1 2026

Preliminary data from China Customs shows robust growth in both fertilizer exports and imports:

Q1 2026 (January-March):

• Exports: 8.16 million tons (+14.1% YoY)

• Export value: USD 1.76 billion (+22.6% YoY)

• Imports: 5.001 million tons (+30.5% YoY)

• Import value: USD 1.86 billion (+59.6% YoY)

March 2026 (Single Month):

• Exports: 3.10 million tons (+24.8% YoY)

• Export value: USD 681 million (+41.8% YoY)

• Imports: 1.681 million tons

• Import value: USD 631 million

• Average CIF import price: USD 375.49/ton

III. Joint Warning from Three Major Institutions: Fertilizer Prices May Stay High Long-Term

The ongoing Middle East conflict is triggering widespread energy and economic disruptions. On April 13, the International Energy Agency, International Monetary Fund, and World Bank jointly warned that fuel and fertilizer prices may remain elevated for an extended period.

Key impacts highlighted include:

• Global supply disruptions affecting energy-importing countries, especially low-income nations

• Rising prices of oil, natural gas, and fertilizers

• Increased risks to food security and employment

• Declining export revenues for some Middle Eastern energy producers

Shipping through the Strait of Hormuz has not yet returned to normal. Supply chain disruptions continue to hinder commodity transport recovery. Even if navigation resumes, it will take time for supply levels to return to pre-conflict conditions.

Additional projections:

• The IEA has lowered its global oil demand forecast for 2026, while global oil supply saw a sharp decline in March

• The IMF revised global economic growth down to 3.1%, potentially falling to 2% if the conflict persists

• Inflation risks are rising significantly

The institutions emphasized the need for stronger global cooperation and the urgent restoration of shipping routes to mitigate economic damage.

IV. Brazil’s Fertilizer Demand Expected to Decline in 2026 Amid Tight Global Supply

According to Rabobank’s Global Fertilizer Semi-Annual Outlook, Brazil’s fertilizer demand in 2026 is projected at 47.2 million tons, down from 49.1 million tons in 2025.

Analyst Bruno Fonseca noted that demand recovery remains weak due to:

• High farmer debt levels

• Elevated interest rates

• Limited credit availability

• Ongoing geopolitical tensions

Brazil depends on imports for approximately 90% of its fertilizer supply, making it highly vulnerable to disruptions such as those in the Strait of Hormuz.

Key developments:

• Middle Eastern fertilizer imports now account for only 12% of Brazil’s total

• Urea import share from the region declined from 53% (2021) to 36% (2025) 

• Around 70% of urea imports arrive between May and December, limiting short-term impact from supply disruptions

However, fertilizer affordability is deteriorating:

• Urea prices in Brazil surged 76% in Q1 2026 

• Farmers face increasing procurement pressure

If the Strait of Hormuz were to close, global fertilizer supply could drop by 800,000 tons per month. The region accounts for:

• 30% of global urea trade 

• 48% of global sulfur trade 

Such supply shocks cannot be easily offset. Global fertilizer supply is expected to reach historically low levels in 2026, with prices unlikely to return to pre-conflict levels before 2027.

Farmer purchasing power indices show:

• Negative trends for nitrogen and phosphate fertilizers

• Fertilizer prices rising faster than agricultural commodity prices

• Increasing pressure on farm profitability

V. Mosaic Cuts Production in Brazil, Further Tightening Supply

Mosaic Company has announced the closure or suspension of two major phosphate fertilizer operations in Brazil to reduce costs, with an expected annual production reduction of approximately 1 million tons.

Key actions include:

• Closure and sale of the Araxá superphosphate facility

• Suspension of mining operations at the Patrocínio site

• Fospar plant already shut down in December 2025

The primary driver behind these decisions is the surge in sulfur prices. Sulfur CIF prices in Brazil have risen to USD 720–730/ton, significantly increasing production costs.

VI. Bangladesh DAP Production Halted Due to Natural Gas Shortage

Bangladesh’s only DAP producer, DAP Fertilizer Company Limited, has completely halted production due to ammonia supply disruptions and depleted inventories.

The root cause lies in the shutdown of five domestic urea plants since early March, driven by concerns over natural gas supply disruptions linked to Middle East tensions. DAPFCL relies heavily on these plants for ammonia supply.

Key facts:

• Daily production capacity: 800 tons 

• FY2024–2025 output: 49,500 tons (down from 92,600 tons the previous year)

• Annual fertilizer demand: 6.5-6.9 million tons 

• DAP demand: 1.5 million tons, with ~1.4 million tons imported annually 

Ongoing disruptions in the Strait of Hormuz are adding uncertainty to imports.

Currently:

• Urea plants have been shut for over six weeks

• Daily fertilizer production loss: ~7,100 tons 

Authorities expect partial restoration of natural gas supply around May 1, which would allow ammonia production and subsequently DAP production to resume.

Global Fertilizer Market Weekly Update (CW17)