Fertilizer Market Brief (Mid-October 2025)

I. International Market Updates

(1) Indonesia’s B50 Policy Marks a “Historic Turning Point” for Potash Demand

Indonesia’s Minister of Energy and Mineral Resources, Arifin Tasrif, recently announced that biodiesel containing 50% palm oil-based biofuel (B50) has completed laboratory testing and is expected to be fully implemented in the second half of 2026, aiming to achieve zero diesel imports. This policy will reshape the palm oil industrial chain and trigger an explosive increase in potash fertilizer demand.

As the world’s largest palm oil producer, Indonesia’s crude palm oil (CPO) output reached 33.496 million tons from January to July 2025, up 11.11% year-on-year. However, the B50 program will require 19.73 million kiloliters of palm oil-based biofuel, and aging oil palm plantations are expected to cause long-term supply pressure. To counter this, Indonesia plans to expand oil palm plantations by 2.3 million hectares.

Given that oil palms are highly dependent on potash fertilizer (accounting for 8% of global potash fertilizer consumption, roughly five times that of nitrogen and phosphate fertilizers), and each hectare requires 300–600 kg of potash fertilizer annually, the new plantations will add an estimated 690,000–1.38 million tons of additional annual demand once in production.

Import data already reflects this surge: Indonesia imported 3.44 million tons of potassium chloride in 2024, while imports from January–July 2025 surged to 3.10 million tons, up 47.6% year-on-year, nearly reaching the previous year’s full-year level. Malaysia’s imports of potassium chloride reached 1.28 million tons, also up 47%. Together, the two countries account for 90% of global palm oil production, and their synchronized import growth highlights the planting boom driven by biofuel policies.

Hong Leong Investment Bank (HLIB) predicts that factors such as a potential return of the La Niña phenomenon and the implementation of the B50 policy will keep CPO prices firm through Q1 2026. With stronger profitability, palm growers will have greater affordability and willingness to invest in fertilizers, driving potash demand to new highs.

(2) Urea Market: Southeast Asia Sees Recovery as India’s Tender Draws Global Attention

The Southeast Asian urea market is showing signs of recovery. An Indonesian trader reportedly sold 7,000 tons of granular urea to the Philippines at USD 400 / ton, scheduled for shipment in early November—about USD 7 / ton higher than previous deals, indicating that regional demand for November loadings is picking up.

However, the overall strength of demand remains constrained by weather and crop prices. Thailand and Vietnam still hold high urea inventories and have made no new purchases in the past month.

In India, Rashtriya Chemicals and Fertilizers (RCF) launched a urea import tender on October 15, attracting 25 bidders with total offers of 3.66 million tons, requiring shipment by December 10, 2025. As of late September, India’s urea stocks stood at 4.9 million tons, down 30% year-on-year. The market expects India to import 2.5–3.0 million tons before year-end to prepare for the Rabi planting season.

Current Middle East urea FOB prices are USD 385–395 / ton, Iranian offers at USD 365–370 / ton for about 200,000 tons, and Brazilian CFR prices hover around USD 420–440 / ton. The tender results are likely to set a benchmark for global urea prices in Q4 2025.

(3) Global Potash Market: Weak Demand Meets Supply Chain Uncertainty

Global potassium chloride prices continue to come under pressure, with small declines recorded in Brazil, Europe, South Africa, and Laos, mainly due to sluggish end-user demand.

In Brazil, fertilizer demand has slowed amid volatile grain prices; in Europe, high energy costs have dampened buyers’ enthusiasm; and in China, despite stable CFR prices, the agricultural application season has passed, leaving distributors with high inventories. Meanwhile, capacity expansion in new producing regions such as Laos has heightened concerns about oversupply.

On the supply side, uncertainties persist. Although the Red Sea risk premium has eased following the Israel–Hamas peace agreement, shipowners remain cautious about route safety. Rerouting around the Cape of Good Hope increases costs and transit times, affecting potash shipments from the Middle East to Asia and Europe.

In Sweden, Cinis Fertilizer has abandoned its year-end target of full-capacity production (100,000 tons SOP) due to weak market expectations. Bangladesh, citing a high CFR offer of USD 393.70 / ton, canceled its 160,000-ton KCl tender, underscoring growing price sensitivity at the end-user level.

In the short term, weak demand will continue to weigh on prices. However, Brazil’s low inventory levels and the upcoming China–India annual contract negotiations could serve as key turning points for price recovery, as both countries are expected to begin talks early to stabilize the market.

II. China Fertilizer Market Overview

(1) Potash Market: Stalemate in Supply–Demand, Sharp Regional and Product Divergences

China’s potash market remains in a state of “limited supply and even weaker demand.” Regional price variations are pronounced:

• In border-trade regions, supply of 62% KCl is tight, traders have raised quotations but face low inventory, limiting new transactions.

• The China–Europe rail route has eased some pressure, but northern ports have seen price declines due to increased arrivals, while southern regions maintain high levels amid short supply.

• Domestic KCl production is stable yet weak in price; low-grade products dominate supply, while high-end grades see minor price drops.

The sulfate of potash (SOP) market faces mounting pressure. Mannheim-process producers, squeezed by high raw material costs and negative margins, are running at low operating rates. Rising inventories are forcing wider discounts. Resource-based producers maintain steady operation, but traders’ quotations are slowly edging down as transactions remain sluggish.

Downstream compound fertilizer producers, affected by the end of the autumn sales season, are reducing operations and facing high finished-product inventories, dampening raw material purchasing interest. Traders focus on low-priced materials. In the short term, the potash market is likely to remain stagnant, with SOP inventories potentially forcing further price cuts. In the long term, attention should be paid to compound fertilizer destocking progress and international price transmission.

(2) Phosphate Rock, Sulfur, and Synthetic Ammonia Market Dynamics (Oct 9 – 16, 2025)

• Phosphate Rock: No major price changes in October. Mines and traders are mainly executing previous orders. With operating rates of downstream MAP producers declining, new contract signing is limited. In the north (Liaoning), production resumption at large mines has eased supply tightness. In the south, production remains normal, and current phosphate fertilizer producers have sufficient phosphate rock inventories to last until January 2026.

• Sulfur & Sulfuric Acid: Port sulfur inventories stand at about 2.43 million tons, slightly up from the previous period. However, tight overseas supply has limited new arrivals. Supported by firm USD prices, domestic sulfur prices continue to rise as traders hold back on sales. Downstream buyers, with low inventories, are actively restocking, pushing up inquiries and spot prices. Sulfuric acid prices have risen in tandem, up 30–80 RMB / ton this week, driven by higher sulfur costs and steady downstream demand.

• Synthetic Ammonia: Regional differentiation persists. Prices are falling in North and Central China but rising in the Southwest due to plant maintenance–related supply constraints. Overall, the market remains weak and in consolidation mode.

Attention: The above information is for commercial reference only due to the diversity of information collected, and Kelewell is not responsible for the authenticity of the data.