From March 14 to August 31, 2026, China implemented temporary controls on agricultural phosphate fertilizers, suspending export declarations for monoammonium phosphate (MAP) and diammonium phosphate (DAP). The policy's initial intention was to prioritize domestic spring agricultural production and stabilize domestic fertilizer supply and prices. From September 1, China resumed normal export declarations for agricultural phosphate fertilizers. However, the market needs to understand that the resumption of declarations does not equate to an unrestricted and complete liberalization of exports. Exports will still be subject to quota and license management, prioritizing the safety of fertilizer use for autumn wheat. If domestic supply and demand become strained, regulators can still readjust the export schedule.
The industry generally anticipates that September will largely be a policy transition period. Over the past six months, China's phosphate fertilizer exports have been almost zero, creating a global phosphate fertilizer supply gap. It is worth noting that sulfur, a core raw material for phosphate fertilizers, has seen a significant decline from its historical high in June. Domestic spot prices have fallen by nearly 40% from their peak, and the panic premium for Middle Eastern sulfur has subsided, alleviating some of the pressure on global phosphate fertilizer production costs. However, due to the slower-than-expected recovery of some damaged facilities in the Middle East, sulfur prices remain significantly higher than before the conflict.
Meanwhile, recent shipping costs have risen significantly, and increased logistics costs are eroding some of the price difference between domestic and international markets. Even if supplies arrive, the landed costs in importing countries remain high, becoming a new constraint on global fertilizer trade. Geopolitical risks in the Strait of Hormuz have not been completely eliminated, shipping insurance costs remain high, and uncertainties persist in both raw materials and logistics.
Domestically, autumn fertilizer stockpiling has begun, but farmers' willingness to purchase is weak in the face of high fertilizer prices. The market is mainly operating on a just-in-time basis, and large-scale stockpiling has not yet arrived. Urea maintains its annual export quota system, and domestic inventory pressure remains. Overseas demand depends mainly on Indian tenders and the demand driven by Brazil's fertilizer stockpiling season. Regarding potash fertilizer, high levels of imported potassium chloride inventory at domestic ports are suppressing spot prices. Laos' potash production capacity continues to expand, gradually changing the structure of Asian potash import sources and reducing reliance on a single source.
Looking at the global market, Morocco's OCP maintains firm phosphate fertilizer prices; India enters its rabbi planting season, resulting in rigid demand for urea and phosphate fertilizer imports; Southeast Asian cash crop potash demand exists, but procurement is cautious at high prices. Major potash suppliers such as Belarus and Canada maintain a strategy of controlling production to support prices.
Overall, the global fertilizer market in the second half of this year faces multiple constraints: on one hand, the anticipated supply increase from China's return to the phosphate fertilizer export market; on the other hand, geopolitical risks, high raw material costs, and insufficient purchasing power among farmers. China's fertilizer export policy always prioritizes domestic food security, and the export pace will dynamically follow domestic supply and demand changes. Global buyers should not overly expect a concentrated release of supply in the short term and need to continuously monitor the progress of China's quota implementation, sulfur price trends, and the final results of large-scale tenders in India.
