Global Phosphate Supply Crisis. Food security at risk (Updated April 2026)

Updated April 1, 2026

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. By early April, the crisis has escalated into one of the most serious threats to global food security in recent memory, compounded by the outbreak of war in the Middle East. The crisis stems from multiple simultaneous constraints: China's suspension of phosphate exports, the closure of the Strait of Hormuz blocking Gulf shipments, a deepening sulfur shortage, Russian export restrictions, and persistently constrained domestic production 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. The NDRC implemented a dual-track pricing model that effectively banned phosphate exports, removing roughly 40% of the global phosphate trade from international markets. 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. While some hope exists in the trading community that China may reopen nitrogen exports by May and phosphate exports by August, analysts caution against counting on Beijing as a relief valve. China's resource nationalism reflects a broader global trend in which governments increasingly view fertilizers as strategic national assets rather than tradeable commodities.

The second and most acute disruption came from the Middle East. Following the joint U.S.-Israel military strikes on Iran beginning February 28, 2026, under the operation dubbed "Epic Fury", 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, with only a handful of Indian, Pakistani, and Chinese-flagged vessels allowed to pass. As of April 1, the blockade has persisted for one full month with no resolution in sight. Saudi Arabia, which exports approximately one fifth of the world's phosphate fertilizer and is the leading supplier of phosphate imports to the United States, has its seaborne exports trapped behind the blockade. The disruption extends far beyond phosphate. Persian Gulf producers account for roughly a third of global urea exports, a quarter of ammonia exports, and half of global sulfur exports. Qatar halted liquefied natural gas output after strikes on its energy infrastructure, disrupting downstream fertilizer production across the region and beyond.

The sulfur shortage has triggered what analysts describe as a "sulfur cascade" through the global phosphate supply chain. With approximately 44 to 45% of global sulfur trade passing through the Strait of Hormuz, phosphate producers worldwide face a critical feedstock shortage. Sulfuric acid is essential for the production of monoammonium phosphate (MAP) and diammonium phosphate (DAP). The Mosaic Company reported a $250 million EBITDA hit in the first quarter of 2026 due to the doubling of sulfur costs, and idled single super phosphate production at its Fospar and Araxa plants in Brazil while halting new sulfur purchases. In India, 65.8% of sulfur imports come from West Asia, making the country extremely vulnerable to this dimension of the crisis.

In the United States, domestic phosphate production has improved but remains unable to compensate for the global shortfall. Mosaic, which controls more than half of U.S. phosphate production, reported that North American phosphoric acid production increased 21% year over year in the fourth quarter of 2025, and set a 2026 target of at least 7 million tonnes of finished phosphate production. Phosphate rock production reached 14.6 million tonnes in 2025, including record output at its Miski Mayo operation in Peru and the highest Florida rock production since 2022. However, elevated sulfur costs and the competitive pull of the export market are limiting the domestic price relief. U.S. producers have recently exported phosphate to India, a sign that domestic supply is actively competing in the global export market, which pulls prices higher at home. As one industry analyst put it, the farmer in the Midwest now has to compete with the export market to keep supply available domestically.

A third supply shock has emerged from Russia. In March 2026, Russia's Agriculture Ministry abruptly suspended ammonium nitrate exports for at least one month, citing the need to prioritize domestic spring planting. This move followed a series of Ukrainian drone strikes that successfully targeted several major Russian chemical facilities, including the Acron Dorogobuzh plant, curtailing Russia's fertilizer output by an estimated 11%. Russian plants were already running near full capacity before the disruptions. Egypt, another significant nitrogen fertilizer exporter representing roughly 8% of global urea trade, has seen its production capacity halved after the suspension of natural gas exports from Israel's Leviathan and Karish fields, which Egyptian plants rely on for feedstock.

The combined effect of these disruptions has been dramatic. DAP prices in Southeast Asia surged to $800 to $850 per tonne cfr by mid-March, up from $730 to $750 before the conflict began in late February. Urea prices at the U.S. Gulf port of New Orleans spiked above $650 per tonne, with some reports indicating prices nearly doubling from late 2025 levels of $350 per tonne. According to Morningstar analyst Seth Goldstein, nitrogen fertilizer prices could roughly double from pre-conflict levels and phosphate prices could climb by about 50%. In parts of the U.S. Midwest and Europe, fertilizer retailers have temporarily stopped quoting prices altogether, unable to guarantee delivery or manage the risk of further overnight surges. In Argentina, MAP prices translated to over $1,000 per tonne delivered to farmers, up from $875 to $900 per tonne just one week earlier.

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. In response to the current crisis, the Indian government has launched emergency measures, advancing a global tender for 13.5 lakh tonnes of urea imports and boosting domestic gas allocation to urea plants from 60% to about 80% of requirements. Indian officials have stated that fertilizer stocks for the Kharif 2026 season are adequate and that advanced procurement from diversified sources including Russia, Morocco, Australia, Indonesia, and several African nations is underway. However, India's dependence on the Gulf region remains acute, with over 40% of its urea and phosphate fertilizers sourced from the region. Analysts warn that an Indian import tender announcement in coming weeks could send global prices surging even higher.

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. China's pivot toward LFP battery production is permanently reallocating phosphate resources, creating a long-term structural shift in the global DAP market that will persist well beyond the current crisis.

On the trade policy front, 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 released in January 2026, these tariffs increased the price of DAP by 28.6% during the period when duties were set at their full initial rate, and cost U.S. farmers an estimated $6.9 billion between the 2021 and 2025 planting seasons. The National Association of Wheat Growers estimated the burden on wheat growers alone at nearly $1 billion over the same period. On March 20, a coalition of 62 state grower groups and eight national agriculture organizations, including the National Corn Growers Association and the American Soybean Association, filed a letter with the Department of Commerce urging it to revoke the duties as the mandatory five-year sunset review begins in April. The Trump administration is reportedly weighing a temporary suspension of the countervailing duties on Moroccan and Russian phosphate. Senator Josh Hawley has called for an investigation into potential price gouging, and Agriculture Secretary Brooke Rollins has indicated the administration is exploring every potential avenue to control costs. Nutrien, one of the two major domestic phosphate producers alongside Mosaic, has publicly supported the removal of the duties. Israeli phosphate producer ICL reported no damage to its mining and production operations after an Iranian drone strike landed near its Rotem Industrial Zone facility, though the incident underscored the growing security risks affecting global phosphate infrastructure.

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.

The agricultural consequences are already visible. The spring planting season has arrived across the Northern Hemisphere under some of the most challenging economic conditions in a generation. Corn production costs are estimated at approximately $166 per acre due to elevated fertilizer prices. A survey by the National Corn Growers Association found that nearly 40% of U.S. producers planned to reduce fertilizer applications, with many considering a shift from corn to less fertilizer-intensive crops such as soybeans. In Africa, the disruptions are hitting smallholder farmers especially hard. In East Africa, early heavy rains have left farmers with very narrow windows to prepare fields and apply fertilizer, and shortages are already forcing reduced applications that could cut maize yields. Ethiopia, which sources over 90% of its nitrogen fertilizer from the Gulf through Djibouti, faces especially acute shortages during its planting period. According to AI-powered food risk platform Helios AI, global food prices could rise 12 to 18% above pre-crisis levels by the end of 2026 even if the conflict were to end immediately, with further increases expected into the first half of 2027. The analysis noted that unlike crude oil, there is no strategic reserve framework for fertilizers, leaving each country to fend for itself.

As of April 1, 2026, no resolution is in sight on any front. 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. Even after the war ends, Gulf producers would need clear security guarantees before resuming shipments, and insurance costs for Hormuz transit are expected to rise permanently. Morocco is working to expand output, but the timeline for bringing new capacity online remains uncertain, and the U.S. countervailing duties continue to block Moroccan phosphate from reaching American farmers at competitive prices. Russia's output has been degraded by Ukrainian strikes and constrained by its own export restrictions. The phosphate supply crisis of 2026 represents one of the most significant threats to global food security and agricultural profitability in recent years, and industry analysts increasingly warn that its consequences will extend well into 2027 and beyond.