The phosphate market is expected to fluctuate upwards in 2025, due to the persistence of supply constraints and the continued strengthening of demand for fertilizers, energy and for industrial uses. This is what the Department of Financial Studies and Forecasts (DEPF) of the Ministry of Finance states in its latest economic report.
An increase in DAP (fertilizer) prices could be caused by new export restrictions in China or Russia, geopolitical tensions, or a recovery in demand in Asia, the Americas and Europe, notes the DEPF. In addition, she notes, localized increases could be triggered by disruptions in maritime routes (Red Sea, Black Sea, etc.).
She adds that the phosphate market remains faced with economic, geopolitical and climatic uncertainties and fluctuations in the prices of energy, inputs and agricultural raw materials.
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According to World Bank forecasts, cited by the DEPF, DAP prices are expected to fall by 9% in 2025, after an increase of 2% in 2024, as supply conditions improve and new capacity production are put into service.
During last November, raw phosphate prices remained unchanged at $152.5 per tonne, marking a 56% fall from their peak reached in 2023, notes the DEPF. For DAP prices, they stabilized at $574.5 per tonne in November, after an increase of 10% between May and October.
Over the first eleven months of 2024, DAP prices increased by 2.6% in annual variation, while those of raw phosphate saw a clear drop (-54%).
Fertilizer prices supported by falling supply
Furthermore, the rise in the prices of phosphate fertilizers is hampered by the low energy and agricultural prices as well as the relatively affordable costs of inputs, including natural gas and ammonia, indicates the DEPF.
However, she adds, the prices of phosphate fertilizers remain supported by tight global supply, with low levels of global stocks. Export restrictions imposed by China limit supply on the market, despite record deliveries from Morocco (+16% to 10.2 million tonnes in January-October 2024) and a weakening in demand caused by high price levels.
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In the United States, restrictions on imports from Morocco and Russia are reducing the availability of DAP and MAP (fertilizer), at a time when Hurricane Milton in October worsened the situation by causing a loss of production of ‘around 250,000 tonnes.
Chinese exports of DAP, which constitute a third of global trade in this product, fell by 8% in the first nine months of 2024 compared to the previous year. China, in fact, favors supplying its domestic market at affordable prices, thus raising fears of new export restrictions.
At the same time, major importers in India and Brazil, who have postponed purchases in the hope of lower prices, are expected to return to the market to restock for the next application season, providing support to price of DAP.
