Phosphate market is entering a new era

In early April (06.04.2026), UkrAgroConsult reported increasing tension in the phosphate market in the near term.

Today, the situation has escalated further toward major structural changes driven by limited availability and rising prices. The key drivers include shrinking alternative supply sources, ongoing logistical disruptions, and rising costs of essential raw materials.

Previously, phosphate supplies from Morocco during the so-called “Strait of Hormuz crisis” were partially offset by China and Saudi Arabia. However, their global export availability has now nearly disappeared. A significant share of global phosphate flows passes through the Strait of Hormuz, which has faced continuous logistical restrictions and higher transport costs for two months. Additional pressure comes from volatile prices of sulfur and ammonia, as well as limited availability of these key inputs.

With the Iran-related conflict continuing, the phosphate market is expected to adapt its product strategies and demand behavior. According to analysts at ICIS, three main adjustments are likely.

First, a shift away from diammonium phosphate (DAP) and monoammonium phosphate (MAP) toward triple superphosphate (TSP), single superphosphate (SSP), and specialized NPK formulations that increase phosphorus efficiency per unit.

Second, buyers are likely to become more dependent on Morocco, as traditional suppliers such as China (which has effectively banned phosphate exports) and Saudi Arabia (limited by physical supply constraints) are exiting the market.

In this context, another emerging option is the formation of large purchasing consortia by national buyers. A similar approach has already been used in India: in early May, Indian companies announced a tender for the purchase of 521 thsd tons of ammonia for delivery between June and August. Six companies are participating in the tender, collectively covering around 90% of India’s ammonia imports. A similar structure could emerge in negotiations with Morocco for large-scale supplies of DAP and TSP.

Third, global markets may face a significant decline in demand, although uneven across regions. Some regions may absorb the shock, while others — including parts of Sub-Saharan Africa — could be priced out of the market, creating potential risks for food security.

However, if high prices persist through 2027, discussions on food security will move from theoretical analysis to practical, real-world decision-making and policy action.