Global phosphate fertilizer supply is tightening sharply due to a sulfur shortage triggered by Middle East conflict and Strait of Hormuz disruptions, forcing major producers to cut output and pushing prices to record highs. Overseas buyers of fertilizers and agricultural chemicals should prepare for sustained supply constraints, higher costs, and potential crop yield impacts through 2026.
Supply-chain impact
The Strait of Hormuz disruptions have slashed global commercial sulfur flows by about 50% since late February, when conflict with Iran erupted. Sulfur is essential for producing phosphate fertilizers used on corn, soybeans, rice, and oil palm. OCP Nutricrops CEO Faris Derij said the crisis started as a raw-material issue but has become a full fertilizer supply shock. Before the conflict, roughly half of the world's traded sulfur passed through the strait.
Production cuts and price surge
Mosaic, a top US-based fertilizer producer, has reduced phosphate output in Brazil and the US after sulfur prices soared. OCP Group accelerated maintenance schedules at some plants to cut production, though it maintains strategic sulfur and finished-product inventories that should sustain operations through July. Sulfur prices have jumped from $150-180 per tonne a year ago to $850-900 per tonne currently, with some trades reaching $1,000 per tonne.
China export halt and India scramble
China has suspended phosphate fertilizer exports at least until August 2026 to manage domestic supply. India has launched a tender for 1.6 million tonnes of phosphate fertilizers, including 1.3 million tonnes of DAP, the largest single package in history. Saudi producers Ma'aden and SABIC are trying to maintain exports via land routes to Red Sea ports, but CRU data shows shipments from Saudi Arabia have roughly halved due to the Hormuz disruptions.
What buyers should watch
CRU's Chris Lawson noted that all major phosphate supply sources are simultaneously constrained. Even if the Strait of Hormuz reopened tomorrow, analysts warn the phosphate market would take longer to recover due to its geographic concentration and heavy reliance on Gulf-region sulfur. ICIS editor Chris Vlahopulos warned of a bifurcated market: wealthy countries can secure supply, while poorer regions like sub-Saharan Africa and Southeast Asia risk being priced out, forcing farmers to reduce phosphate application and potentially lowering crop yields as early as next year.
China sourcing context
Chinese phosphate fertilizer margins are already negative on raw-material costs alone, excluding processing costs, according to CRU's Willis Thomas. This makes it unlikely that China will resume exports soon. Alternative fertilizers requiring less sulfur and ammonia, such as triple superphosphate (TSP), are gaining traction. OCP Group expanded TSP production years ago and is exploring alternative sulfur sources like pyrite and pyrrhotite from metal processing.
Source: Read the original report | Published: May 28, 2026