The DAP market is navigating a supply crisis of rare severity. Two simultaneous constraints — Chinese export restrictions and Middle East logistics disruptions — have removed an estimated 30-40% of global phosphate fertilizer supply from accessible trade flows, according to industry analysts. Prices at the benchmark index level have risen 11.6% month-on-month to $722.50/t, and the forward curve suggests further upside through Q3 2026.
China: the structural supply valve stays shut
China's National Development and Reform Commission (NDRC) led a meeting in December 2025 that concluded 'orderly exports of phosphate fertilizers will be suspended in principle until August 2026.' Industry consensus is that no new export plans will be proactively scheduled before that date. DAP and MAP (monoammonium phosphate) are classified as 'highly restricted' fertilizers under China's 2026 regulations, requiring both an export license and statutory inspection that effectively blocks non-approved shipments.
The 2026 tariff quota sets a ceiling of 6.9 Mt of DAP inside quota, but a March 2026 Customs announcement explicitly suspends exports of phosphate fertilizers and phosphate compound fertilizers, reinforcing the de facto shutdown. China previously accounted for roughly 30% of world phosphate trade. Market commentary frames this as the removal of 7-9 Mt of phosphate supply from accessible global markets.
The impact was already visible in 2025 data: Chinese DAP exports fell approximately 24% year-on-year in January-September 2025, according to trade data. The 2026 extension deepens the cut.
Morocco and the Middle East: partial relief, persistent risk
Morocco's OCP, the world's largest phosphate exporter, saw its FOB DAP price spike from approximately $570/t to $640/t after the Hormuz shock, then correct to $595-610/t by mid-June 2026. Egypt's NCIC tender in early July sold DAP at $872/t FOB Damietta, indicating that high global FOB values persist even outside the Moroccan benchmark.
The Middle East dimension compounds the China problem. Five Gulf exporters — Iran, Qatar, Saudi Arabia, UAE, and Bahrain — are major phosphate and ammonia suppliers. Iran's phosphate production, while smaller than its urea output, is partially disrupted by gas feedstock constraints. Saudi Arabia's Ma'aden and UAE's fertilizer producers have maintained output but face elevated shipping costs and insurance premiums for Hormuz transit.
Demand: Brazil and India drive the buying
Brazil, the world's largest agricultural importer of fertilizers, is the key demand driver. DTN retail data shows DAP in the US Corn Belt at $640-740/t for spring 2026, up 20-30% year-on-year. NOLA (New Orleans) barge DAP is assessed at $620-700/t. Brazil's soybean crop is projected to reach a record 6.5 billion bushels in 2025-26, driving structurally high phosphate demand. Brazil imports over 85% of its fertilizer requirements, making it directly exposed to global supply tightness.
India's latest DAP tender landed at $930-935/t CFR, reflecting the extreme tightness in Asian markets. India relies on imports for the vast majority of its phosphate requirements and has limited ability to substitute domestic production. The premium of Asian CFR prices over global benchmarks highlights the regional supply imbalance created by Chinese export restrictions.
Forward outlook: three scenarios
Bull case: Chinese export restrictions extend beyond August 2026 into the 2027 season, keeping an effective 7-9 Mt of supply off the market. Combined with any additional Middle East disruption, DAP could test $900-1,000/t before year-end. Ma'aden capacity expansion and OCP ramp-up would be insufficient to fully offset Chinese volumes.
Bear case: China resumes exports in August 2026 as scheduled, adding 5-7 Mt back into global trade over Q4 2026-Q1 2027. Hormuz normalizes fully. DAP prices would correct rapidly toward $550-650/t.
Base case: Chinese restrictions ease partially in late 2026 but not fully. DAP holds in the $650-780/t range through H2 2026, with seasonal peaks during Brazil's main import window (August-October) and India's Rabi season procurement.
This is the tightest phosphate market since the 2008 food crisis. For buyers with exposure to DAP and MAP, the immediate priority is securing Q3-Q4 2026 volumes at or near current index levels. Waiting for a Chinese policy change is risky — the NDRC has not signaled any intention to lift restrictions early, and the August 2026 review date could easily be extended. Consider diversifying sources toward Moroccan OCP and Saudi Ma'aden material, but expect CFR premiums of $100-150/t over FOB due to freight costs. For procurement teams with flexibility, partial substitution with TSP (triple superphosphate) or phosphate rock direct application may offer cost relief, though agronomic performance will differ. Build in price escalation clauses tied to the benchmark index rather than fixed-price contracts. Watch Brazilian real exchange rate movements — BRL weakness amplifies local-currency fertilizer costs and can compress Brazilian demand, which would eventually pressure global prices.