US Fertilizer Shortage Pushes Buyers Toward Moroccan Phosphate

The disruption of the Strait of Hormuz has removed a large share of Gulf fertilizer supply from the global market, and the United States has responded by reopening its market to Moroccan phosphate. Six months into the crisis, the substitution is under way but incomplete, and phosphate prices remain close to their highest levels in two years.

The supply gap opened on 28 February 2026, when shipping through the Strait of Hormuz was largely halted after the start of the war in Iran. Around one third of globally traded fertilizer normally passes through that waterway, including roughly 21 million tonnes of annual urea export capacity and about 4 million tonnes of DAP export capacity across Iran, Qatar and Saudi Arabia. Trade data compiled by the International Trade Centre showed combined export volumes from Hormuz-dependent economies falling by 54 percent between April 2025 and April 2026. Urea briefly doubled from about 400 dollars per tonne to more than 850 dollars per tonne, and DAP climbed from roughly 580 dollars per tonne to around 770 dollars per tonne.

Several parallel restrictions made the phosphate side of the market tighter than the Hormuz closure alone would suggest. China, historically the largest phosphate exporter, extended its curbs on DAP, MAP and selected NPK blends through August 2026, covering an estimated 50 to 80 percent of its export volumes. Russia kept its sulfur export ban in place through the end of 2026. Sulfur is a core input for phosphoric acid production, and spot prices have passed 1000 dollars per tonne, more than 130 percent above their level at the start of the year. Producers therefore face rising costs at the same time as buyers face thinner supply.

The United States entered the crisis with limited options. Domestic phosphate mining has fallen by more than half since 1995, and the country imports close to 40 percent of the phosphate fertilizer its farmers apply. Countervailing duties imposed in 2021 after a petition by Mosaic had kept Moroccan and Russian phosphate largely out of the market, which concentrated American imports on Saudi and Peruvian cargoes at the very moment Gulf shipping seized up.

On 29 June 2026 the White House declared an emergency under Section 318(a) of the Tariff Act of 1930 and suspended anti-dumping and countervailing duties on Moroccan phosphate fertilizer for up to eight months, meaning through February 2027. The Department of Agriculture estimated the measure could cut prices by about 22 percent and save American farmers around 1.82 billion dollars a year. Officials stressed that the suspension is limited in time rather than in volume, so buyers can place large forward orders and hold supply well beyond the expiry date.

The first physical result arrived on 17 August 2026, when a vessel carrying about 54000 tonnes of triple super phosphate from Morocco docked at the Port of New Orleans. It was the first OCP cargo to reach the United States in more than five years, and the product is moving inland ahead of the autumn application season. Traders noted an important limitation. The cargo carried triple super phosphate rather than the DAP and MAP grades that dominate American demand, so its effect on headline prices has been muted. Additional vessels are reported to be en route.

Prices confirm that the relief has been partial. DAP stood at 795 dollars per tonne in the week ending 17 August, up 3.58 percent over the month, while Corn Belt DAP has moved from around 700 dollars per tonne early in 2026 to roughly 850 dollars per tonne. Department of Agriculture data shows phosphate fertilizer prices at their highest level in two years as the late summer season begins. Analysts point out that in a normal market the arrival of new supply would have pushed prices sharply lower, and that the absence of that reaction reflects how restrained the remaining exporters still are.

Conditions in the Gulf have deteriorated again. A memorandum of understanding signed on 17 June had briefly restored safe passage arrangements, but the United States reinstated its naval blockade of Iranian ports on 14 July after renewed attacks on commercial vessels. Transits collapsed to six on 10 August against a pre-crisis baseline of about 85 per day, and only three vessels were logged on 23 August. Hundreds of ships remain at anchor in the Persian Gulf, and the International Maritime Organization reported that roughly 6000 seafarers are still stranded and that around 70 attacks on shipping have been recorded since the conflict began.

The Commerce Department recommended in July that the countervailing duty on Moroccan phosphate be kept in place at a subsidy rate of 20.04 percent, with final results of the sunset review expected around 28 October 2026. Mosaic has also filed a fresh petition seeking anti-subsidy duties on OCP exports, and the Moroccan producer has said it will contest it. If the suspension lapses in February 2027 without a durable settlement, the supply channel that has just reopened could close again.

Washington is also pursuing a structural answer. On 26 August 2026, CHS and OCP North America announced a joint venture to build a phosphate fertilizer plant at Cornerstone Energy Park in Waggaman, Louisiana, with an investment of up to 450 million dollars and a capacity above 1 million tonnes a year. It would be the first new phosphate plant built in the United States since 1984 and could cut imported finished phosphate volumes by close to half. Groundbreaking is targeted for the first half of 2027 and completion for late 2028 or early 2029, so the project will not change supply for the coming season.

The wider effect is a shift in the geography of phosphate trade. North Africa is becoming the swing supplier for buyers cut off from Gulf and Chinese cargoes, and India has also turned to African producers to cover its own needs. That concentration reduces immediate scarcity but leaves importers dependent on a very small group of exporters, and on the political durability of the arrangements that grant them access.