Global Fertilizer Market Brief – Price Fluctuations, Trade Shifts & Policy Focus

In recent times, the global fertilizer market has been navigating a complex interplay of supply and demand, pricing, and policy dynamics: China's potash prices keep hitting new highs despite soft demand; international urea quotes are rising; India’s tenders are putting global prices on edge; Russia’s fertilizer exports are accelerating toward BRICS nations; and Europe has decided to completely halt purchases of Russian and Belarusian fertilizers by 2028.

Let’s delve into the deep-seated logic behind price movements, supply–demand tensions, and policy adjustments to understand the current state of the international fertilizer market.

China Fertilizer Market Dynamics - potash market continues at elevated levels

Recently, China’s potash market has continued its strong upward momentum, with prices hitting record highs. The significant tension between tight supply and weak demand has led to a market characterized by “high quotes, slow deals.”

1. Prices keep climbing, all categories rising

• As of July 12, prices hit new highs: the port quote for 62% white potash chloride rose to RMB 3,600/ton, and border‑trade port prices approached RMB 3,400/ton.

• Driven by cost pass‑through, K₂SO₄ producers were compelled to raise prices in response to the climbing trend in potash chloride quotations.

2. Supply tightness is the core driver – both imports and domestic production restricted

• Insufficient import arrivals: China depends on imported potash chloride, but recent arrivals from major producers like Russia and Canada have not noticeably increased. Port inventories remain low, traders are reluctant to sell, and circulating supply has tightened.

• Limited domestic supplementation: Companies such as Salt Lake Potash Co. have maintained production, but supply increases are insufficient to cover the import shortfall. High transportation costs in Qinghai mean some supplies are prioritized for long‑term contract clients, leaving little volume for the open market.

3. Weak demand suppresses deals, industry operating rates under pressure

• High prices curb procurement: Downstream compound fertilizer producers have autumn fertilizer needs, but strong prices are dampening their willingness to buy. Many opt to restock only as needed or switch to alternatives such as potassium sulfate or potassium nitrate to cut costs.

• The “high‑quote, low‑deal” atmosphere: Actual transactions are largely negotiated on a deal‑by‑deal basis. Traders and end users are cautious, with few large orders, mostly small scattered purchases, leading to slower sales pace.

• Operating rates fall: Difficulty in procuring potash chloride and high costs have led potash sulfate producers using the Mannheim process to lower operating rates; some small‑to‑mid‑sized firms have reduced production or halted operations to avoid risks.

4. Short‑term outlook: high‑level oscillation, import replenishment as key variable

In the short term, the market will remain supported by tight supply, likely keeping prices at high levels. However, weak demand and falling operating rates will restrain further increases.

Key factors to watch going forward include: import arrivals of potash fertilizers, Chinese policy adjustments, and changes in downstream demand. If import replenishment doesn’t improve, the high price trend may persist; if import volumes pick up, the pace of increases could slow.

China’s Fertilizer Import and Export Data for June 2025: Exports Soar, Imports Dip Slightly

Preliminary statistics from China Customs indicate that in 2025, China’s fertilizer trade has shown a pattern of “soaring exports and slightly declining imports”:

Exports: Strong year-on-year growth in both volume and value

• Cumulative data: From January to June, China exported a total of 17.126 million tons of various bulk fertilizers, a year-on-year increase of 35.9%; the total export value reached USD 4.069 billion, up 25.9% YoY.

• June alone: In June, China exported 4.288 million tons of fertilizers, up 44.9% YoY; the export value was USD 1.357 billion, an increase of 59.3% YoY. Both the monthly export volume and value grew faster than the cumulative average for the first half of the year.

Imports: Declines in both volume and value compared to the previous year

• Cumulative data: From January to June, China imported 6.938 million tons of various fertilizers, down 3.3% YoY; the total import value was USD 2.181 billion, a decline of 10.2% YoY.

• June alone: In June, China imported 758,000 tons of fertilizers, with an import value of USD 259 million. The average CIF (cost, insurance, and freight) price for customs clearance was USD 342.08/ton.

International Fertilizer Market

DynamicsGlobal urea market surges across the board since early July – production regions hike prices by USD 30–96/ton

Recently, international urea prices have shown a strong upward trend, with export quotes rising across major producing regions, increasing by USD 30–96/ton. Significant price gains are seen across all regions:

• China market:

– Bulk small‑granule FOB USD 380.01–440.01/ton, up USD 5–50/ton

– Large‑granule port FOB USD 445.01–450.01/ton, up USD 20–30/ton

• Baltic & Black Sea region:

– Black Sea small‑granule port FOB USD 410.01–445.01/ton, up USD 20–35/ton

– Baltic small‑granule port FOB USD 405.01–450.01/ton, up USD 20–45/ton

• Other major producing regions:

– Middle East small‑granule port FOB USD 477.01–482.01/ton, up USD 42–82/ton

– Brazil small‑granule CFR USD 440.01–480.01/ton, up USD 25–45/ton

– Iran large‑granule port FOB USD 430.01–450.01/ton, up USD 20–30/ton

– Egypt large‑granule port FOB USD 470.01–507.01/ton, up USD 20–30/ton

– Southeast Asia large‑granule CFR USD 490.01–500.01/ton, up USD 10–30/ton

• India’s RCF tender: Won at USD 494.01–495.01/ton CFR this week—an increase of USD 95–96/ton versus last week—taking center stage in the global market.

Overall, across all major producing and consuming regions, international urea prices are climbing sharply. These increases span small and large granules alike. Notably, significant price hikes in major producing hubs like the Middle East and China underscore the broad upward trend driven by tight supply and demand conditions in the urea market.

India’s Tender Dominates Urea Market Direction – Intensifying Tug-of-War Between Supply Recovery and Weak Demand

India’s tender as core price indicator; supply recovery remains limited

India’s urea tender for 2 million tonnes, concluded on July 7, with shipments scheduled by August 22, is drawing intense market attention for its pricing. The current urea-to-grain value ratio remains high, raising affordability concerns and prompting scrutiny around whether the tender bids signal overpricing.

On the supply front, Iran and Egypt have resumed production: Iran is shipping urea at a base price of USD 420/ton FOB, but trader interest remains subdued. Egypt is selling small volumes of granular urea to Europe at USD 460/ton FOB, mostly drawn from inventory releases.

Regional market dynamics: policy and cost driving price divergence

• Vietnam tax hike forces price increases: From July 1, a 5% VAT is imposed on fertilizer imports, raising costs for previously VAT-exempt shipments. Petrovietnam’s Ca Mau plant has increased urea FOB prices to USD 495–500/ton.

• Middle Eastern producers stay on the sidelines: Ahead of the India RCF tender announcement, Middle Eastern producers remain inactive. Suggested target pricing is USD 450/ton FOB, but current market interest is low.

• Philippines demand weakens: Farmgate rice prices are only USD 159–194/ton, prompting farmers to reduce fertilizer purchases. Importers are reluctant to buy at elevated prices. From January to May, the Philippines imported 319,000 tons of urea, up 20.8% YoY, mainly from Indonesia, Qatar, and Brunei.

• Ethiopia restocking tender: After some contracts reportedly went unfulfilled, EABC has relaunched a tender for 212,000 tons of granular urea.

Summary:

In the short term, the urea market trajectory is being shaped by India’s tender outcome. Although production from Iran and Egypt has resumed, supply remains constrained and hasn’t eased tight market sentiment. Meanwhile, high prices and weak end-user demand are exerting downward pressure on volumes.

Russia’s Fertilizer Exports to BRICS Surge Over 60% in Three Years – Trade Focus Shifts to Emerging Markets

The head of the Russian Association of Fertilizer Producers (RAFP), Andrei Guriyev, announced at the BRICS Business Forum in Rio de Janeiro that over the past three years, Russia’s fertilizer exports to BRICS countries have surged by more than 60%. BRICS nations now account for half of Russia’s total fertilizer exports, with Brazil, as the largest buyer, making up nearly one quarter of that share.

European Market to Completely Halt Imports of Russian and Belarusian Fertilizers by 2028

On July 10 (local time), Michał Baranowski, Deputy Minister of Economic Development and Technology of Poland, announced that driven by EU tariff policy, the European market will completely stop importing fertilizers from Russia and Belarus as of July 1, 2028. He described this as “an important achievement under Poland's rotating presidency of the European Union.”

On May 22 this year, the European Parliament passed a new tariff regulation targeting Russian and Belarusian fertilizers and certain agricultural products:

• A 6.5% basic tariff will be imposed on fertilizer imports from Russia and Belarus, with an additional charge of €40 to €45 per ton applied during 2025–2026;

• A 50% tariff will be imposed on Russian and Belarusian agricultural products not previously subject to additional duties.

  
  

• These new tariffs officially came into effect on July 1, 2025.

  
  

Recently, Brussels has imposed new duties on Russian fertilizers, targeting nitrogen-based products such as urea and ammonium nitrate. This measure is part of a broader EU strategy to reduce its dependence on imports from Russia.

According to the European Commission, these tariffs will support domestic production and help the EU fertilizer industry, which had been severely impacted by rising energy prices. Between 2021 and 2023, fertilizer costs in Europe rose by more than 140%, while Russian fertilizers remained highly competitive due to well-developed logistics networks.

These tariffs, starting at €40–45 per ton (equivalent to $47–53), will gradually increase to €430 per ton (approximately $506) by 2028. The rising supply costs have triggered concerns among European farmers, who warn that these additional costs may lead to higher food prices and reduced agricultural output.

Conclusion

The global fertilizer market is currently being driven by a combination of tight supply, cost pass-through, and policy factors. In the short term, the struggle between high prices and suppressed demand will likely persist; in the long term, attention must be paid to the pace of import replenishment, the implementation effects of policy measures, and the unfolding demand in emerging markets.

Only by grasping these key variables can we gain a clearer understanding of the future trajectory of the fertilizer market.

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.