Global Phosphate Supply Crisis. Food security at risk

The global phosphate fertilizer market entered 2026 facing a severe supply crunch driven by converging disruptions across the world's top producing and exporting nations. The crisis stems from three simultaneous constraints: China's suspension of phosphate exports, the closure of the Strait of Hormuz blocking Saudi Arabian shipments, and persistently low domestic production rates in the United States.

On December 11, 2025, China's National Development and Reform Commission (NDRC) convened a special meeting with major phosphate fertilizer producers and distributors, announcing that orderly exports of phosphate fertilizers would be suspended in principle until August 2026. This decision was driven by soaring domestic phosphate prices, which had climbed roughly 30% during 2025, along with strategic concerns about food security ahead of the spring planting season. China, the world's largest phosphate producer responsible for about 30% of global output, had already been tightening export controls since 2021. Annual exports fell from approximately 9.9 million metric tons in 2021 to an estimated 4.5 million metric tons in 2025, with the latest suspension effectively removing several more months of supply from world markets.

The second major disruption came from the Middle East. Following the joint U.S.-Israel military strikes on Iran beginning February 28, 2026, the Strait of Hormuz was effectively closed to commercial shipping by early March. Iran's Islamic Revolutionary Guard Corps warned all vessels against transiting the strait, and tanker traffic dropped to near zero within days. Saudi Arabia, ranked among the top four global phosphate exporters and the leading supplier of phosphate imports to the United States, found its seaborne exports trapped behind the blockade. Nearly 50% of global sulfur exports, a critical input in phosphate fertilizer manufacturing, also transit through the Strait of Hormuz, compounding the disruption.

In the United States, domestic phosphate production has been unable to compensate for the shortfall. The country's phosphate facilities have been operating at approximately 60% capacity, constrained by aging infrastructure, hurricane damage sustained in late 2024, and ongoing reliability challenges. The Mosaic Company, which controls more than half of U.S. phosphate production, reported a target of reaching 80% operating rates at its facilities during 2026 but acknowledged this recovery would take time. North American phosphate application during fall 2025 was estimated to be down about 20% from normal levels as farmers responded to elevated prices.

The combined effect of these disruptions has been dramatic. Production and exports of phosphate fertilizers are concentrated in just five countries: China, Russia, Morocco, Saudi Arabia, and the United States. With China offline until August and Saudi Arabia locked behind the Strait of Hormuz, only Morocco and Russia remain as major export sources. Diammonium phosphate (DAP) prices began 2026 at the highest-ever price-to-corn value ratio on record, according to StoneX Group analysis. Phosphate costs surged by more than $200 per ton compared to the previous year.

The ripple effects extend well beyond the fertilizer industry. Phosphorus is an irreplaceable nutrient in agriculture with no synthetic substitute. Approximately 85% of the world's high-grade phosphate rock reserves are concentrated in five countries, with Morocco alone holding around 70% of total reserves. India, the world's largest importer of DAP, had started 2025 with historically low stockpiles and struggled to rebuild them throughout the year. Reports of public protests in India over fertilizer scarcity during critical sowing periods underscored the urgency of the supply situation.

The crisis also intersects with structural trends reshaping phosphate demand. The rapid growth of lithium iron phosphate (LFP) battery production for electric vehicles is diverting increasing volumes of phosphoric acid away from fertilizer manufacturing, creating additional competition for a resource already in short supply.

Countervailing duties imposed by the United States on phosphate imports from Morocco and Russia since 2021 have further constrained supply options. According to a Texas A&M University analysis, these tariffs alone cost U.S. farmers an estimated $6.9 billion between the 2021 and 2025 planting seasons. The U.S. International Trade Commission launched a mandatory five-year review of these duties on February 27, 2026, amid growing calls from farm groups, lawmakers, and even one of the two major domestic producers, Nutrien, to remove them.

The European Union's implementation of the Carbon Border Adjustment Mechanism (CBAM) for fertilizer imports on January 1, 2026, added another layer of cost pressure, effectively raising the global floor price for nutrients. Global fertilizer prices climbed 2.4% in the first weeks of 2026 alone.

A survey by the National Corn Growers Association found that nearly 40% of U.S. producers planned to reduce fertilizer applications in response to high prices, echoing the pattern seen in 2022 following Russia's invasion of Ukraine. Industry analysts have warned that if sustained lower phosphate use leads farmers to deplete soil nutrients, the consequences for global food production could unfold over multiple growing seasons.

As of early March 2026, no resolution is in sight. China has given no indication of lifting its export suspension before August. The duration of the Strait of Hormuz closure remains tied to the unpredictable trajectory of the U.S.-Iran conflict. Morocco is working to expand output by approximately 2.4 million metric tons per year, but the timeline for bringing new capacity online remains uncertain. The phosphate supply crisis of 2026 represents one of the most significant threats to global food security and agricultural profitability in recent years.