Fertilizer prices remained elevated in Q3 compared to both the first half of the year and the end of 2024.
Potash prices surged at the start of the year as the Trump administration threatened tariffs on Canada, the top supplier to US farmers. During the third quarter, prices were 20 percent higher than at the end of last year.
Meanwhile, phosphate prices continued to climb through Q3 on the back of supply shortages, spurred by export restrictions from top producer China. Prices were further influenced by US tariffs.
What happened to phosphate and potash prices in Q3?
According to data from the World Bank, the average quarterly phosphate price rose to US$770.60 per metric ton (MT), up from US$673.20 in Q2, and significantly higher than the annual average of US$563.70 in 2024.
On a monthly basis, phosphate climbed to US$736 in July, then climbed to a three year high of US$795.10 in August. Since then, the price has fallen to US$780.63 in September and US$754 in October.
The quarterly average for potash fell slightly in Q3 to US$352.20 per MT, down from US$359.20 the previous quarter, but remained higher than US$283.90 in the last quarter of 2024.
On a monthly basis, potash prices eased to US$362.50 in July, and continued to fall to US$356.50 in August. They sank further to US$352.50 in September and US$352 in October.
What factors impacted phosphate in Q3?
Phosphate prices have been primarily influenced over the last several years by export restrictions from China, which have declined to 6.6 million MT in 2024 from 9 million MT in 2021. The restrictions were put in place to protect the domestic supply, and while the hope was that they would eventually ease, that hasn’t happened.
“As expected, their exports started to arrive in July to September; however, the government had a self-imposed October 15 cutoff date for export submission. That date came and went without an extension, so now the belief is their flows will slow to a crawl very soon,” he said. The situation may face additional headwinds, as China has imposed more restrictions on key battery technologies and precursors for phosphate-based batteries. These restrictions will add to demand for ex-China supply as the agricultural sector competes with battery makers for a limited supply of phosphate.
Demand for phosphate is also high, particularly from India, which has been working to increase its stockpiles since the end of 2024, when they reached a low of 1.1 million MT. However, stockpiles had more than doubled to 2.4 million MT at the start of October, with imports climbing to 4 million MT during the April to September period.
Much of the demand has been covered by supply from Saudi Arabia and Morocco, which signed several offtake agreements with Indian importers in July. “They were a major driver of higher prices for much of 2025 as they played catch up on stockpiles, and have finally reached a comfortable number of tons, which has allowed them to slow their desperate pace. The slower demand pace has allowed the market time to breathe/correct lower,” Linville said.
For US-based farmers, supply isn’t the only issue.
On August 7, a host of new tariffs as high as 25 percent were applied to phosphate imports, including from Saudi Arabia, which accounted for 54.7 percent of imports during the first five months of the year. Although there were some concerns that higher prices could prompt farmers to rethink their strategy, Linville hasn’t seen that materialize either.
With reports that farm yields this year have been higher, it may prompt farmers who have been on the fence about a fall application of phosphate to reconsider, as a significant yield would indicate some phosphate soil depletion.
“While still spoty, we are continuing to hear reports that phosphate demand is better than expected,” he said.
However, Linville noted that a surge in last-minute demand it could make supplies tighter and limit the ability for phosphate to make it onto the fields.
What factors impacted potash in Q3?
Linville said potash news was quiet during the quarter, pointing to stable prices and a well-supplied market.
In July, BHP (ASX:BHP,NYSE:BHP,LSE:BHP) announced it was delaying the opening of its Jansen mine in Saskatchewan. It was initially slated to start production in 2026, but has instead moved its timeline back to 2027 and is also considering pushing the second phase to 2031, citing cost overruns that have ballooned to US$7 billion.
Although potash has so far escaped US tariffs, Linville noted some concern following Ontario’s anti-tariff ad, which ran in the US during the World Series. “We continue to hope/believe that potash will be left alone as part of the North America Trade agreement. Assuming potash is left alone, markets should continue as normal; however, if we start seeing barriers to entry, US farmers will likely bear the brunt of most/all of those tariffs,” he said
Potash and phosphate price forecast for 2025
While potash markets remain stable, phosphate markets are much more dynamic.
Unless there is a significant shift in China’s exports, supply should remain tight. In his most recent weekly update on November 5, Linville noted that the situation could become dire for US consumers before the end of the year.
“We continue to advise our people that if they decide they need phosphate after all, do not wait to lock it up. Days very well may matter. Heck, hours might matter. Supplies are tight and can ill-afford a sudden demand jump,” he wrote.
Additionally, markets are likely to become further strained in the years to come as limited supply meets increased demand from outside the agricultural sector.
Securities Disclosure: I, Dean Belder, hold no direct investment interest in any company mentioned in this article.