Global Fertilizer Market Weekly Update (CW37) | Aug. 31 - Sep. 7, 2026
1. India’s DAP Support Keeps Import Demand Firm - but Weather Adds Uncertainty
India continues to shield farmers from high international DAP prices through a heavily subsidized domestic market. The government has maintained DAP at an MRP of INR 1,350 per 50 kg bag, while a special provision of INR 3,500/MT has been used to compensate producers and importers for logistics, GST-related costs and reasonable margins. For Kharif 2026, the government further increased the overall budget for phosphatic and potassic fertilizer subsidies by about INR 43.2 billion versus Kharif 2025, underlining its commitment to fertilizer affordability.
The pressure on import economics remains significant. In August, India’s NFL was reported to have purchased DAP at the mid-$910s/MT CFR India on a sight-equivalent basis, illustrating the wide gap between international replacement costs and India’s controlled retail price. This makes government support critical to maintaining import flows ahead of the Rabi season.
However, demand should not be viewed as entirely one-directional. India recorded a 16% rainfall deficit in August, while the India Meteorological Department expects September rainfall to remain below normal. Weaker soil moisture could affect the timing and intensity of Rabi sowing, particularly wheat and oilseeds. Therefore, policy support remains strongly bullish for DAP demand, but weather introduces an important downside variable.
Market implication: India remains a major source of support for global phosphate demand, but the combination of record-high import costs and weather uncertainty argues against assuming unlimited price elasticity.
2. Strait of Hormuz Disruption Intensifies, Keeping Fertilizer and Sulphur Supply at Risk
Shipping conditions through the Strait of Hormuz have deteriorated again. Reuters reported on September 6 that commodity-vessel traffic averaged only around 10 transits per day over the previous ten days - the lowest level since May - with traffic falling to just two vessels on one recent day following renewed U.S.-Iranian attacks on commercial shipping. On September 7, Iran also announced plans for a new restricted maritime zone and a revised shipping corridor through the Gulf, adding another layer of uncertainty for vessel operators.
The implications for fertilizer markets remain substantial. According to CoBank, the Middle East supplies more than 60 million tonnes of fertilizers and feedstocks annually, around 45 million tonnes of which normally move through Hormuz. The region accounts for more than 30% of global urea exports and roughly half of internationally traded sulphur, making prolonged shipping disruption especially important for nitrogen and phosphate markets.
Sulphur availability is further constrained by Russia. The Russian government has extended its export ban on industrial sulphur - covering liquid, granular and lump forms - through December 31, 2026, prioritizing domestic fertilizer production.
Market implication: The fertilizer market is increasingly dealing with a structural logistics problem rather than a temporary freight spike. Even where production remains available, access to vessels, insurance and reliable export routes is becoming a key price-setting factor.
3. Sulphur Shock Is Feeding Directly into Phosphate Fertilizer Costs
Sulphur has become one of the most important cost drivers in the phosphate market.
According to farmdoc daily, typical DAP production requires approximately 1.5-2 tonnes of phosphate rock, 0.4 tonnes of sulphur and 0.2 tonnes of ammonia. Sulphur therefore has a direct and meaningful impact on phosphate production economics.
The price move has been extraordinary. Vancouver sulphur was below $100/MT in 2024, exceeded $400/MT by late 2025, and has recently traded above $1,000/MT. Recent spot levels represent an increase of more than 130% since the beginning of 2026 and more than 300% year-on-year.
The relationship is already visible downstream. U.S. Corn Belt DAP prices have risen from roughly $700/MT in early 2026 to around $850/MT, while the statistical correlation between Corn Belt DAP and Vancouver sulphur prices since 2024 stands at approximately 0.70. Anhydrous ammonia, another key DAP input, surged close to $1,000/MT earlier this year before easing back toward $750/MT.
Farmers are now entering the purchasing window for the 2027 crop year, meaning higher sulphur and ammonia costs may still have further lagged effects on phosphate fertilizer pricing.
Market implication: Even if freight conditions improve temporarily, phosphate prices may remain structurally supported until sulphur availability and production costs normalize.
4. Qatar Cuts September Sulphur Price - but Freight Absorbs the Reduction
QatarEnergy lowered its September Qatar Sulphur Price by $10/MT to $880/MT FOB Ras Laffan/Mesaieed. On paper, this represents some easing at origin. In practice, however, the reduction is being absorbed by exceptionally high freight and risk costs.
Argus assessed freight for a 30,000–35,000 MT sulphur cargo from Qatar to China at $145–160/MT, implying a theoretical delivered cost of approximately $1,025-1,040/MT CFR China before additional insurance premiums. Vessel owners remain reluctant to send empty ships into the Gulf because both access to loading ports and the ability to exit safely remain uncertain.
By comparison, Vancouver sulphur was assessed at $1,050-1,200/MT FOB, but freight to China for larger 50,000-60,000 MT vessels was only around $33-37/MT. North American material is therefore not necessarily cheaper on an outright CFR basis, but its logistical reliability, freight efficiency and delivery predictability have become considerably more valuable.
Key Takeaways
India remains a major support pillar for DAP demand, as government subsidies continue to bridge the widening gap between international prices and controlled domestic retail prices.
Hormuz remains the dominant geopolitical risk for fertilizers. Latest shipping data show that traffic has deteriorated again rather than normalized.
Sulphur is now a central driver of phosphate fertilizer pricing. Prices above $1,000/MT are already feeding into higher DAP production and farm-input costs.
Origin price reductions in the Middle East are being neutralized by freight, insurance and vessel-risk premiums.
Supply reliability is becoming almost as important as FOB price. Buyers are increasingly evaluating sourcing options based on freight security, vessel availability and delivery certainty rather than headline origin prices alone.
Global Fertilizer Market Weekly Update (CW37) | Aug. 31 - Sep. 7, 2026
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