Global Fertilizer Market Turmoil: U.S. Tariff - Driven Restructuring and Outlook

As of April 2025, the global fertilizer market is undergoing an unprecedented “stress test.” The latest U.S. tariff policy—imposing a minimum 10% base tariff on nearly all imported goods, with higher rates applied to imports from approximately 60 countries—has sent ripples across international markets like a stone cast into a calm lake.

Nitrogen, phosphate, and potash fertilizers have been hit first and hardest, triggering a dramatic reshaping of global supply and demand dynamics.

Let’s first review some of the most immediate market reactions:

• Export costs of urea from the Middle East have surged, leading to a near-complete halt of U.S. imports from the region—down by roughly 98%.

  
  

• Potash supplied by Canada is now quoted at over USD 320/ton for U.S. buyers.

  
  

• In the lead-up to spring planting season, sulfur prices have soared, rising nearly CNY 300/ton compared to previous levels.

  
  

This article breaks down the impact of the new U.S. tariffs on major global fertilizer categories and offers insights into future developments.

Background: A Tariff Tsunami from the U.S. Sends Shockwaves Globally

The scope and intensity of this U.S. tariff initiative are unprecedented. According to a White House statement, starting April 5, 2025, the U.S. will impose a 10% base tariff on all imported goods, regardless of origin.

In addition, “additional customs duties” with higher rates have been applied to selected countries in response to what the U.S. sees as unfair trade practices. For instance, Jordan and Israel—both key fertilizer exporters—now face tariffs of 20% and 17%, respectively. Tunisia is subject to a steep 28% tariff.

Even Canada and Mexico, traditionally protected under the USMCA agreement, are not fully exempt. Goods that fail to meet origin criteria are now subject to a 25% tariff.

Notably, potash—critical to food security—has been given a lower 10% tariff rate, reflecting U.S. concerns over domestic agri-input supply stability. However, this also foreshadows heightened tensions in North American agri-trade relations.

The global ripple effects have been swift and far-reaching, roiling markets from raw materials to finished goods. Fertilizers—being agricultural lifelines—have reacted most sharply.

Below is a detailed look at how nitrogen, potash, and phosphate markets are being reshaped.

Urea Market: Middle Eastern Supply Blocked, U.S. Imports Plummet

In the nitrogen sector, the U.S. has imposed tariffs on major overseas urea suppliers, significantly driving up import costs. The Middle East (e.g., Saudi Arabia, Egypt) has long been a key source for U.S. urea, but these countries have not received special tariff exemptions, and most are now subject to the standard 10% rate.

Some countries are facing even higher tariffs—for example, Algeria's urea exports to the U.S. are now taxed at 30%. These tariffs, combined with freight costs, have pushed the landed cost of Middle Eastern urea beyond what U.S. buyers can absorb.

As trade data confirms, U.S. urea imports from the Middle East have plunged nearly 98%, effectively grinding to a halt. Most of this supply is now being redirected to other markets.

Domestic U.S. urea prices have surged in response. Within days of the tariff announcement, barge prices at New Orleans (NOLA) spiked. Early April trading saw NOLA urea quoted at USD 410/short ton (approx. USD 451/metric ton), up USD 40 from prior levels—a new high since September 2023.

To meet spring demand, the U.S. may increasingly rely on domestic nitrogen production or turn to lower-tariff suppliers such as Canada (which, if compliant with origin rules, may continue duty-free exports). Meanwhile, exporters like Nigeria and Qatar are redirecting urea shipments to South America and Asia—Brazil, for instance, has seized the opportunity to purchase spot cargoes at slightly higher prices.

This new trade pattern suggests a structural shift: barring significant policy change, U.S.-Middle East urea trade may remain subdued long-term.

Potash Dynamics: Canadian Supply Dominance Faces Tariff Pressure

Potash market fluctuations are deeply intertwined with North American trade. The U.S. depends heavily on imports for around 90% of its potash supply—nearly 80% of which comes from Saskatchewan, Canada.

Thus, when the U.S. initially announced a 25% tariff on most Canadian goods, alarm bells rang throughout both countries’ ag sectors. A full pass-through of this cost could have raised potash prices by over USD 100/ton.

Market panic followed, with U.S. potash spot prices rising steadily from USD 303/short ton in early January to USD 348 by late February—a 15% increase to roughly USD 380/metric ton, nearing 2023 peak levels.

Fortunately, lobbying by ag stakeholders and internal policy debates led to a partial reversal. In March, the U.S. reduced the potash tariff from 25% to 10%, effectively offering partial exemption. Given the lack of viable alternatives, this was a pragmatic concession. Nevertheless, even a 10% tariff has raised import costs, pushing U.S. domestic prices higher.

Currently, North America’s potash market is in a state of elevated volatility. Canadian exporters are attempting to pass tariff costs onto U.S. farmers, while U.S. distributors cautiously manage inventory.

As of early April, barge prices at NOLA are holding at around USD 320/short ton (~USD 350/metric ton)—slightly above prior levels, but reflecting a correction from panic highs. Elsewhere, the potash market has also firmed up due to North American tensions—Brazil’s granular MOP prices recently climbed to USD 345–350/ton, up USD 10.

As long as any tariff remains on Canadian potash, Canadian producers will hold greater bargaining power in the U.S. market, and U.S. farmers will continue facing elevated procurement costs. The U.S. may explore alternative sources—such as Jordan or Israel, where potash tariffs range from 10% to 20%—but replacing Canadian volumes in the short term remains highly challenging.

Importantly, Canadian retaliatory tariffs have escalated the situation. Canada has targeted U.S. phosphate fertilizers (e.g., DAP) in its countermeasures. Given that Canada imports significant phosphate volumes from Florida, this two-way tariff war has produced a lose-lose scenario for both parties—possibly pushing them toward negotiation.

The future of potash trade will depend not just on supply fundamentals, but also on evolving U.S.-Canada trade relations.

Phosphate and Sulfur: Raw Material Costs and Rebalancing Markets

The phosphate sector is also feeling the heat from the new tariffs. Even before the latest round, the U.S. had already imposed steep countervailing duties on phosphate fertilizers from Morocco and Russia, effectively cutting off imports since 2021.

This led other MENA producers to fill the gap—by 2024, Saudi Arabia supplied 45% of U.S. DAP/MAP imports, with Jordan, Egypt, and Tunisia accounting for another 21%.

Now, the 10% base tariff is layered on top of existing duties. Moroccan phosphate, for instance, already faced a 16.6% duty; it must now shoulder an additional 10%, for a total tariff burden of 26.6%. For countries like China—already subject to special duties—total tax rates exceed 50%.

For newer suppliers such as Jordan and Tunisia, the added tariff erodes competitiveness. Spring demand has driven U.S. phosphate prices up. Brazilian importers, seizing the moment, ramped up purchases—April DAP/MAP landed prices in Brazil rose to USD 660–670/ton, the highest since late 2022.

If such trade barriers persist, global phosphate trade flows will continue to shift. The U.S. may have to boost domestic production or rely more on allies. A regionalized pattern—Americas and Asia consuming their own local output—could emerge.

One direct consequence is the sulfur market surge. Sulfur is a critical input for phosphoric acid and phosphate fertilizer production, and its price often signals fertilizer sector trends.

In 2025, global sulfur prices have climbed rapidly due to strong demand and tight supply. In China, driven by spring planting season, port prices for granular sulfur have hit new records.

In early March alone, Chinese port sulfur prices jumped CNY 300/ton in a week. By late spring, prices in East China ports reached CNY 2,400–2,500/ton—up nearly 15% since before the Lunar New Year.

FOB prices in the Middle East have also surged. Chinese buyers, keen to secure feedstocks, raised their bids—further fueling global sulfur price hikes. Soaring sulfur costs have squeezed phosphate fertilizer margins, forcing producers to raise ex-works prices.

This helps explain why DAP prices in China rose by CNY 200–300/ton in Q1—mirroring sulfur’s surge. It also illustrates the ripple effects of U.S. trade policies: even though sulfur isn’t directly targeted, tariff-induced disruptions are driving up costs across the entire fertilizer value chain.

Looking Ahead: From Turmoil to a New Equilibrium

The current tariff-driven upheaval is both a stress test and a catalyst for long-term restructuring of the global fertilizer industry.

As trade barriers clash with existing production patterns, only the nimblest players—those able to quickly adapt—will find opportunities and anchor themselves in the new landscape.

Over the next 12–24 months, the global fertilizer market is likely to pass through a transition period—from chaos to a new equilibrium.

Governments and businesses alike may accelerate strategy shifts: on one hand, pursuing tariff exemptions, trade negotiations, or subsidies to shield domestic agriculture; on the other, investing in local or diversified fertilizer production to reduce dependency on single sources.

Price volatility and uncertain trade flows will persist. Rising agri-input costs could feed into food prices, sparking broader discussions around inflation and food security.

However, markets will also search for new pathways: alternative trade channels, expanded production in new regions, or technological solutions to boost fertilizer use efficiency. The disruption triggered by these tariffs could ultimately foster a more resilient and balanced global fertilizer system.

In this move from disorder to re-stabilization, every adjustment and strategic response will shape the future map of global agriculture.