US increases phosphate fertilizer exports due to war in Iran, despite domestic market shortage

U.S. fertilizer traders have seized a lucrative opportunity in foreign markets due to the war in Iran, further highlighting how U.S. farmers have been at a disadvantage amid changing global conditions, Bloomberg reported.

Domestic prices for phosphate fertilizers have lagged behind global prices as U.S. farmers, faced with high production costs, have cut back on their use of the fertilizer in corn and soybeans. This has prompted some traders to shift supplies abroad to countries willing to pay more as the conflict in the Middle East disrupts global supply chains.

“U.S. phosphate prices have not kept pace with increases in other global markets,” said Taylor Eastman, a trader at The Andersons Inc.

Traders have bought more than 100,000 tons of phosphate fertilizers for re-export from New Orleans since late February, he said.

The country imported more than 0.5 million tons of diammonium phosphate (DAP), the most common type of phosphate fertilizer, between January and March, making up for previous months of weak supplies and high prices caused by the Trump administration’s retaliatory tariffs. Some of that volume will now be re-exported, adding to the strain on an already tight domestic market. While the United States produces most of its own phosphate, some imports are still needed to meet demand.

The reversal in trade flows comes as the DAP re-export premium hit its highest level relative to New Orleans prices since June 2023 on March 13, according to Bloomberg Green Markets.

Domestic demand is weakening as fewer plantings of fertilizer-intensive crops, such as corn, are expected this season. Corn accounts for more than half of U.S. phosphate use, while soybeans account for about a quarter of demand.

Meanwhile, countries that are more dependent on imports are offering higher premiums to attract limited volumes on the global market. China, the largest producer, has already restricted exports to support its own farmers, and disruptions in the Middle East threaten a large part of the world’s supply of both phosphates and the sulfur needed to produce them.

According to Bloomberg Green Markets analyst Guillermo Fernandez, US shipments are currently being directed to Latin America and India. In particular, two ships with a total capacity of about 60,000 tons (mostly DAP) are likely to have been sent to Latin America. In addition, traders are stockpiling significant volumes of monoammonium phosphate (MAP) for possible re-export.

Tags: export, USA, fertilizers