Potash Supply Disruptions, Freight Rates Doubling… Where Is the Global Fertilizer Market Heading in 2026?

The international fertilizer market is currently undergoing unprecedented transformation. Geopolitical conflicts, major policy shifts among leading economies, and supply chain restructuring have significantly increased market volatility. As we move into 2026, the market is no longer driven purely by supply and demand fundamentals. Instead, it has entered a new phase characterized by the parallel forces of “security priority + cost support + policy intervention.”

I. The Real Impact of Geopolitics on the Global Supply Chain

In recent years, geopolitical conflicts across multiple regions have had profound effects on the fertilizer market. The Ukraine crisis, the Israel–Palestine conflict, and the Red Sea crisis have not only disrupted regional supply chains but have also triggered global market anxiety, leading to sharp price fluctuations.

Potash: Trade Restructuring Rather Than True Supply Disruption

Taking potash as an example—one of the most traded fertilizer products globally—its supply chain has been particularly sensitive to geopolitical developments. Restrictions on the transportation of Russian and Belarusian fertilizers through the Baltic region disrupted traditional trade flows. Russia and Belarus together account for approximately 35%–38% of global potash exports. In the early phase of sanctions, this led to:

• Disruptions at Baltic ports

• Suspension of Lithuanian railway transit

• Refusal by certain insurance companies to cover related cargo

However, UN Comtrade data show that total Russian potash export volumes in 2023–2024 did not decline significantly. Instead, export destinations shifted:

• Exports to the EU decreased

• Exports to China, India, and Brazil increased

Therefore, the fundamental change has been a restructuring of trade flows rather than a disappearance of supply.

The Red Sea Crisis and the Shock to Maritime Costs

The Red Sea crisis caused shipping costs to surge and transit times to lengthen, further intensifying market uncertainty. Specifically:

• During the 2024 Red Sea crisis, freight rates on Europe–Asia routes rose by 80%–120%

• Transit times increased by 10–14 days

• Insurance costs rose by 20%–30%

Under such conditions, companies were forced to prioritize transportation security over cost efficiency. For bulk commodities like potash—characterized by large volume and relatively low unit value—freight can account for 15%–25% of CFR costs, making it highly sensitive to shipping disruptions.

It is worth noting, however, that freight rates began to decline in the second half of 2025, indicating that the impact was cyclical rather than structural.

Geopolitical conflicts have also directly triggered sharp fertilizer price volatility. For instance, following the outbreak of the Israel–Palestine conflict, urea prices surged within a short period, reaching historical highs.

Such extreme fluctuations not only increased operational risks for enterprises but also posed potential threats to global food security.

II. Policy Adjustments and Structural Market Shifts

National policy adjustments have also had structural impacts on the international fertilizer market. The United States, in particular, has implemented a series of differentiated measures in the fertilizer sector:

• Tariff exemptions for potash imports from Canada

• Sanctions on the Belarusian potash industry followed by partial easing

These policies reflect the strategic importance of fertilizers as critical agricultural inputs.

Under the combined influence of geopolitics and policy intervention, global fertilizer trade flows have changed significantly. The traditional cost-optimization logic of trade has been disrupted, and companies are placing greater emphasis on transport security and supply stability.

III. Supply–Demand Dynamics: Toward a New Balance

From the demand side, data from the International Fertilizer Association (IFA) indicate that global fertilizer consumption rebounded in 2023–2024, with a compound growth rate of approximately 4%, significantly higher than the historical average of 1%–2%.

This rebound is largely attributable to heightened global attention to food security amid political and economic instability. Many countries have increased agricultural investment to secure grain supply.

On the supply side, new fertilizer production capacity coming online in the coming years is expected to gradually ease structural tightness, potentially leading to a more balanced global market.

IV. China’s Measures to Stabilize Supply and Prices

Amid global volatility, the Chinese market has demonstrated strong resilience.

East Asia accounts for roughly one-third of global fertilizer consumption. Between 2020 and 2025, the international fertilizer market experienced multiple “black swan” events, which at times dampened global demand. However, under China’s food security strategy, the apparent consumption of nitrogen, phosphate, and potash fertilizers continued to rise. This not only ensured record-high domestic grain output but also provided stable demand support for the global fertilizer market.

China has long relied heavily on potash imports. To mitigate risk, it has implemented several measures to optimize its import structure. Potash shipments returned from Laos have steadily increased, now accounting for approximately 15% of domestic consumption, effectively reducing external dependence.

In addition, China has actively advanced annual potash contract negotiations. In 2026, improved negotiation efficiency and earlier contract finalization helped lock in supply ahead of time, further stabilizing the domestic market.

V. Risk Management and Strategic Discipline for Enterprises

Looking ahead, the global fertilizer market will continue to face uncertainties, but it also presents new opportunities.

In the short term, geopolitical conflicts and policy shifts will remain key influencing factors. Fertilizer enterprises should closely monitor developments in the Ukraine crisis, the Israel–Palestine conflict, and policy adjustments by major economies such as the United States, and adjust business strategies accordingly.

At the same time, as countries worldwide strengthen food security frameworks, robust agricultural planting demand will continue to provide solid underlying support for fertilizer consumption.

In 2026, the global fertilizer market is no longer defined solely by supply–demand mechanics. It is increasingly shaped by strategic security considerations, transportation resilience, and policy coordination.

Companies that prioritize risk control, diversify supply chains, and maintain operational discipline will be better positioned to navigate volatility and capture emerging opportunities.