Diammonium phosphate (DAP) markets entered the second half of 2026 with prices structurally elevated above historical averages, supported by tight global phosphate supply, elevated ammonia feedstock costs, and sustained import demand from India and Southeast Asia. The World Bank’s latest assessment puts DAP around $658/t, up roughly 5% month-on-month in March, with a full-year 2026 forecast of +6% before easing 10% in 2027.
Global DAP production is under dual cost pressure. Ammonia, which accounts for a significant portion of DAP manufacturing expense, remains elevated across most regions — European CFR ammonia touched $750/t in March, and US Midwest anhydrous ammonia is still at $840-1,210/t delivered. Sulfur prices, another key input for phosphoric acid production, have also risen sharply. Argus projects total DAP/MAP/TSP production at slightly less than 60 Mt in 2026, reflecting capacity constraints and feedstock cost pass-through.
China’s phosphate export ban, announced in December 2025 and effective until at least August 2026, is the defining supply-side factor. The ban removed a significant volume of Chinese DAP and MAP from global seaborne markets, tightening availability for import-dependent regions. Traders report that Chinese port inventories of phosphate fertilizers are building, suggesting that when Beijing does lift the ban, a wave of export supply could hit markets in late 2026 or early 2027.
Morocco’s OCP remains the swing producer, with the capacity to adjust output to market conditions. But OCP’s production costs are themselves linked to sulfur and ammonia prices, both elevated in the current environment. The Gulf region supplies 26% of global DAP and 13% of MAP trade, according to IFPRI data, and the Strait of Hormuz disruption also affected phosphate exports from Saudi Arabia, the region’s largest DAP exporter.
India is the demand anchor. The Union Cabinet approved Nutrient Based Subsidy (NBS) rates for Kharif 2026 (April-September) with a total outlay of ₹41,534 crore ($4.49 billion), 12% higher than Kharif 2025. This directly offsets higher global DAP prices. The retail price to farmers remains fixed at ₹1,350 per 50-kg bag, meaning the Indian government absorbs the full difference between global costs and affordable farmgate prices. The full fertilizer subsidy budget for 2026-27 is projected to overshoot original estimates by about 10% if global prices remain elevated.
US buyers are facing a different dynamic. Corn Belt retail DAP averaged $640-740/t in spring 2026, up 20-30% year-on-year, according to DTN data. The seasonal application window has passed for most spring-planted crops, and fall application buying will begin in late August. DTN reports that six of eight major fertilizer prices were lower month-on-month in early July, but DAP and MAP remain 13% higher than a year ago, the steepest year-on-year increases among the major nutrients tracked.
The bull case for H2 2026 includes a worsening of Middle East supply disruption, pushing DAP above $800/t CFR Asia. The bear case: China lifts its phosphate export ban in August as scheduled, releasing pent-up supply into a seasonally softer Q4 market, potentially pushing prices below $550/t CFR. The base case from the World Bank and Argus points to DAP averaging $620-680/t CFR Asia for H2 2026, with the China ban expiration as the pivotal event.
China’s phosphate export ban expiration in August is the defining event for H2 2026 DAP procurement. Expect a wave of Chinese export supply to hit the market in September-October, likely pushing CFR Asia prices down toward the $550-600/t range. Buyers should delay large spot purchases until the ban lifts, covering only immediate requirements. For India-linked procurement, the subsidy framework creates a floor: import prices can fall without triggering panic, but any rally above $700/t will strain the subsidy budget. Secure term contracts with Moroccan and Saudi suppliers for 60-70% of H1 2027 needs before year-end, targeting $580-620/t CFR with volume flexibility. The sulfur cost pass-through mechanism in most DAP supply agreements means any spike in sulfur (currently elevated) will hit contract prices with a lag. Hedge sulfur exposure separately if purchasing on a formula-linked basis.