Global Fertilizer Market Weekly Update (CW21)

China Potash Market Upward | U.S. Agriculture Under Shortages | Cost Inversion in Phosphate Sector

China Potash Market: Narrow Upward Fluctuations as India’s Mega Contract Becomes the Key Market Indicator

In mid-May, China’s potash fertilizer market continued to move within a narrow and relatively stable range, with only modest upward adjustments observed in selected regions. Overall market volatility remained limited, and no clear bullish or bearish trend has yet emerged.

The potassium chloride (MOP) market generally maintained stable pricing, although temporary supply tightness in some local areas triggered slight price increases. Mainstream quotations were reported as follows:

• Port stocks:

  • 62% white potash: RMB 3,150–3,550/ton

  • 60% large granular red potash: RMB 3,300–3,450/ton

• Border trade supply:

  • 62% Russian/Belarusian white potash: RMB 3,150–3,250/ton

• Qinghai domestic supply:

  • 60% white potash delivered price: RMB 3,100–3,350/ton

In contrast, the potassium sulfate (SOP) market continued to show an independent upward trend. Supported by rigid increases in raw material costs and expectations surrounding the upcoming summer maintenance shutdowns at Luobupo Potash facilities in China, SOP prices continued to rise gradually:

• Mannheim-process 52% fully water-soluble powder: RMB 4,300–4,350/ton ex-works

• Resource-based 50% powder: RMB 3,800–3,850/ton delivered

At present, the industry faces a severe cost-price inversion, with many SOP producers operating at a loss, significantly limiting further upside potential.

On the international front, market attention remains firmly focused on India’s annual potash import contract, which is widely expected to be finalized in May. Industry expectations currently place the contract settlement price in the range of USD 380-400/ton. The final agreement is expected to directly influence the global potash price benchmark and subsequently affect the Chinese market through import cost transmission.

Meanwhile, China’s MOP port inventory remains relatively high at approximately 2.1-2.2 million tons, providing short-term supply stability while simultaneously creating downside pressure if imports continue to increase. Combined with China’s domestic policy framework emphasizing fertilizer supply security and price stabilization, overall market sentiment remains cautious.

In the short term, China’s potash market is likely to remain generally stable. However, future price direction will largely depend on:

• The final outcome of India’s annual contract

• Changes in import arrivals

• The implementation of domestic producer maintenance schedules

U.S. Agriculture Under Intensifying Pressure: Farm Bankruptcies Rise as Input Shortages Deepen

The U.S. agricultural sector continues to face mounting pressure in 2026, driven by persistently high fertilizer and energy costs, depressed crop prices, industry consolidation, and mounting policy-related burdens.

Geopolitical tensions in the Middle East, combined with the lingering impact of earlier tariff policies, have pushed up the cost of fertilizers, energy, agricultural machinery, and other farm inputs. At the same time, prices for major crops such as corn have remained weak, leaving many farmers unable to cover production costs and compressing industry profitability to historically low levels.

Data indicates that the United States lost more than 156,000 farms between 2017 and 2025. Farm bankruptcies surged by 46% year-on-year during 2024–2025. In addition, nearly 70% of American farmers reportedly face difficulties securing sufficient fertilizer supplies, significantly affecting both purchasing decisions and field operations.

According to USDA projections:

• Total U.S. farm debt is expected to reach a record USD 625 billion in 2026

• Agricultural production costs are forecast to exceed USD 478 billion

Importantly, these estimates do not yet fully account for the additional cost increases associated with ongoing geopolitical instability, suggesting that actual financial pressure may become even more severe.

Structural issues within the U.S. fertilizer sector have also intensified market stress. Following years of mergers and acquisitions, the domestic fertilizer industry has become highly concentrated, with only a small number of major companies controlling significant pricing power.

Additional tariffs imposed on phosphate fertilizers from Morocco and Russia, together with deliberate production cuts by domestic phosphate producers, have further tightened fertilizer availability across the country. Farmer associations have repeatedly called on policymakers to:

• Remove import tariffs on phosphate fertilizers

• Strengthen oversight of domestic pricing practices

• Address capacity reduction strategies among major producers

These groups warn that without intervention, systemic risks within U.S. agriculture may continue to escalate.

World Bank Monthly Report: Rising Fertilizer Costs Expected to Continue Disrupting Global Agriculture in 2026

In its latest commodity market outlook released in May, the World Bank revised upward its forecasts for global fertilizer prices in 2026.

Driven by simultaneous increases in sulfur prices, natural gas costs, and ocean freight rates, the report projects that global fertilizer prices will rise by approximately 31% year-on-year in 2026.

Among all major fertilizer categories, urea is expected to experience the most significant increase, with prices forecast to climb by more than 60% during the year, primarily due to heavy dependence on Middle Eastern supply chains. Phosphate and potash fertilizer prices are also expected to maintain a steady upward trajectory.

The report highlights that fertilizer-import-dependent regions - particularly in Asia, Africa, and Latin America - are likely to experience the greatest impact. Elevated input costs are expected to continue suppressing fertilizer application rates among farmers, potentially leading to:

• Reduced crop nutrient usage

• Lower agricultural productivity

• Slight declines in global grain output from late 2026 into 2027

The World Bank also noted that rising agricultural input costs could eventually translate into higher food prices worldwide.

Goldman Sachs: Severe Cost Inversion in the Phosphate Sector as Sulfur Prices Force Further Price Corrections

According to Goldman Sachs’ latest phosphate fertilizer industry analysis, the sharp and sustained surge in sulfur prices since the beginning of 2026 has fundamentally disrupted cost structures across the global phosphate sector.

The report indicates that both domestic and international phosphate producers are now facing widespread losses and deep cost-price inversions. Based on the firm’s pricing models, benchmark domestic diammonium phosphate (DAP) prices in China may still require an additional increase of nearly RMB 1,000/ton in order to fully offset rising raw material, energy, and labor costs and restore sustainable profitability.

At the same time, China’s phosphate fertilizer export controls are gradually easing, while overseas demand remains firm amid tight global supply conditions. Against this backdrop, Goldman Sachs expects phosphate fertilizers and downstream phosphate-based products to remain structurally strong, with prices likely to stay biased toward further increases rather than significant declines.

Global Fertilizer Market Weekly Update (CW21)