Entering late July 2026, the international fertilizer market broke its traditional off-season pattern and exhibited a clear divergence, influenced by a combination of factors including tightening raw material supply, disruptions to key shipping routes, and policy adjustments in various countries. The cost center of nitrogen and phosphate fertilizers continued to rise, and the global agricultural supply chain faced a new round of cost pressure.
Tightening raw material supply is the core driver of this round of market volatility. Russia's sulfur export ban officially took effect until December 31, 2026, with exemptions only for members of the Eurasian Economic Union; Kazakhstan followed suit, indefinitely suspending sulfur exports since June 27. With the two major producing countries simultaneously tightening supply, the global sulfur supply is expected to decrease by more than 4.2 million tons throughout the year, further exacerbating the tight supply-demand balance. As a core raw material for phosphate fertilizer production, the persistently high sulfur price directly pushed up the global cost of phosphate fertilizer production, leading to downward revisions in output expectations in major phosphate fertilizer producing countries such as Morocco due to tightened raw material supply.
Escalating shipping risks have exacerbated market uncertainty. Tensions remain high in the Strait of Hormuz. As a crucial passage for global fertilizer trade, the Gulf region handles approximately 34% of global urea, 23% of liquid ammonia, and nearly 50% of sulfur trade. Major shipping companies such as Maersk and COSCO Shipping have suspended direct routes through the Persian Gulf, opting instead to detour around the Cape of Good Hope in Africa. This has increased the voyage time for fertilizer shipments from the Middle East to Asia and Europe by 10-15 days, significantly raising shipping costs. Simultaneously, security risks in the Bab el-Mandeb Strait in the Red Sea have escalated again, with war risk premiums surging daily, causing transit times and freight rates on European routes to fluctuate again.
The nitrogen fertilizer market is showing a clear divergence. For urea, European demand is the main driving force. The French government introduced a nitrogen fertilizer subsidy policy, offering farmers at least €50 per ton for single-element nitrogen fertilizer purchases between June 1st and September 30th, with the subsidy standard for high-cost farms increased to €70 per ton. Following the implementation of this policy, European nitrogen fertilizer purchases have rebounded significantly. Supported by this, Egyptian urea FOB prices reached a high of $448 per ton, while Algerian FOB prices rose to $471 per ton, breaking the usual pattern of weakening prices in July, the off-season.
The potash fertilizer market remained relatively stable overall. Supply from Canada, Russia, and Belarus continued to flow normally, while Southeast Asian autumn planting preparations proceeded slowly, and prices did not fluctuate significantly.
Industry analysts pointed out that the global potash fertilizer market will maintain a high-level fluctuation pattern in the third quarter. Sulfur shortages and shipping risks provide cost support, while export control policies in various countries increase trade uncertainty. For importing countries, securing supplies in advance and diversifying procurement channels will be the main strategies for coping with supply chain risks; while exporting companies need to closely monitor policy windows and shipping route changes and rationally arrange their shipment schedules.
