More farm troubles: Global fertilizer markets seize up after China, Russia keep theirs at home

Quick Overview

Global fertilizer markets are seizing up due to supply constraints caused by China restricting exports of urea and DAP, and the EU imposing tariffs on Russian and Belarusian fertilizer imports, leading to rising prices and increased production costs for farmers worldwide, particularly impacting US farmers who rely on imports for 25% of their fertilizer needs.

Key Points: China halted exports of urea and DAP in October, plunging nitrogen fertilizer exports by over 90% in 2024, as Beijing prioritizes securing domestic supply for its expanding electric vehicle battery sector (phosphate) and agricultural needs. The US agricultural sector faces a significant challenge as fertilizer inputs account for 18% of soybean production costs and around 35% of wheat and corn costs, with US domestic supply only covering 75% of potash needs and less for nitrogen and phosphate. The World Bank noted that US phosphate exports have also been curbed by China to secure inputs for lithium iron phosphate batteries. The EU imposed economic sanctions and new tariffs on fertilizer imports from Russia and Belarus in July, which together account for 25% of the bloc's fertilizer imports, forcing European farmers to seek more expensive suppliers. Russia, a top exporter of nitrogen, phosphate, and potash, is rerouting fertilizer to markets like Brazil and India, while Ukraine's fertilizer production is severely disrupted by the ongoing conflict. The World Bank fertilizer price index peaked in 2022 but remains over three times the 2010 level, with phosphate fertilizers leading an increase in prices again, alongside rising costs for other farm expenses like electricity and labor. US Gulf Coast Di-ammonium Phosphate (DAP) prices reached $764.90/ton for October 2025, significantly higher than a year prior, reflecting global tightening.

Context: This video from 'Inside China Business' examines the compounding global supply chain crises affecting agricultural inputs, specifically fertilizers, driven by geopolitical actions from China and the European Union. The speaker, Kevin Walmsley in Kunming, China, contrasts the US agricultural situation, which is already facing a trade deficit, with the immediate impact of supply shocks from major exporters like China and Russia/Belarus on global fertilizer availability and pricing, ultimately leading to higher costs for farmers in the US and Europe.