Diammonium phosphate (DAP) prices remain elevated in mid-2026, with Indian import parity at $930-935/t CFR and US retail at $911/t, as Chinese export restrictions and Middle East supply chain disruption keep the phosphate market structurally tight. DTN data from the second week of July shows DAP at $911/t on average in the US, 12% above the same period in 2025. Indian buyers — the world's largest DAP importers — are paying $930-935/t CFR for June-July shipments from Morocco and Saudi Arabia.
Chinese export restrictions are the dominant structural factor. Beijing announced export controls on phosphates in late 2025 and extended them through August 2026. The World Bank and CSBP Fertilisers estimate these restrictions removed 7-9 million tonnes from global phosphate trade — roughly 30% of normal export supply. CSBP's Ben Sudlow stated on July 20 that "China will not be re-entering the ammonium phosphate market for 2026 and through to 27," suggesting the restrictions are more than a temporary measure. The domestic Chinese price premium over export parity means producers have no economic incentive to push for quota increases.
Morocco fills the gap — at a price. OCP Group, the world's largest phosphate exporter, has stepped into the breach. Moroccan DAP sold to India at $930/t CFR west coast and $935/t CFR east coast in the latest IPL tender, with 1.3465 million tonnes contracted. OCP's production capacity is substantial, but the company faces its own constraints: environmental permitting timelines for new capacity, sulfur input costs tied to the same Middle East logistics disruptions, and export commitments to Brazil and Europe that limit volume available for Indian tenders.
India's kharif procurement is the spot market anchor. The Indian government reported to Lok Sabha on July 24 that DAP availability is adequate through the Kharif 2026 season, with diversified sourcing from Morocco, Saudi Arabia, Russia, and Jordan compensating for the Chinese shortfall. However, DAP prices at $930-935/t are roughly 40% above the pre-war average of $668/t, compressing margins for Indian farmers who depend on government subsidy support. The subsidy burden is rising: every $100/t move in global DAP prices adds roughly $1.5 billion to India's annual fertilizer subsidy bill.
US and Brazilian markets are feeling the squeeze. In the US Corn Belt, retail DAP was $640-740/t in spring 2026, with NOLA barge at $620-700/t. By July, the DTN survey had pushed the national average to $911/t, with supply constrained by higher-cost imports from Morocco and Saudi Arabia as Chinese product disappeared from the market. Brazil — which imports 57% of its phosphate needs — faces an even more acute version. AgBull reports that Brazilian purchases for the 2026/27 crop are running at only 40-45% of needs, with farmers expected to trim application rates or mine soil nutrients.
Analyst views: Bull case ($950-1,000/t): Chinese restrictions persist through 2027, Middle East logistics remain disrupted, and Indian and Brazilian demand keep sequential tenders well-covered. Bear case ($750-800/t): A diplomatic resolution reopens trade routes, phosphate rock costs normalize, and high prices incentivize demand destruction. Base case ($850-950/t through Q4): Chinese restrictions stay in place, OCP and Ma'aden increase output but cannot fully replace Chinese volumes, keeping the market in a state of structural deficit.
Sulfur costs add a secondary floor. Ammonium phosphate production requires large quantities of sulfuric acid, which itself depends on sulfur — a byproduct of oil and gas refining. The Strait of Hormuz conflict and the Iran war have disrupted sulfur exports from the Middle East, which supplies roughly 40% of global seaborne sulfur. Any sustained sulfur price spike adds $30-60/t to DAP production costs, creating an input-cost floor even if demand weakens.
For procurement teams purchasing DAP, the window for Q4 2026 coverage is narrowing. Chinese restrictions through August 2026 (at minimum) mean that 7-9 Mt of normal trade is simply gone, and the replacement supply from Morocco and Saudi Arabia commands a premium. Indian tenders are setting the spot level; any large tender from IPL in the next 4-6 weeks will likely keep CFR India firmly above $900/t. Buyers should consider: (1) locking in Q4 volumes at $900-930/t CFR rather than gambling on a Q1 2027 pullback, (2) exploring alternative phosphate sources such as Jordanian DAP (typically at a $10-20/t discount to Moroccan) or Russian product where sanctions frameworks permit, and (3) testing monoammonium phosphate (MAP) as a partial substitute — MAP has historically traded at a $30-50/t discount to DAP in tight phosphate markets.