Phosphate (DAP)

Phosphate fertilizer is a small-volume, high-value corner of the nutrient world, and DAP (diammonium phosphate) is its benchmark product. The chain runs from phosphate rock, dug from sedimentary deposits, through phosphoric acid, made by dissolving the rock in sulphuric acid, to the finished granular fertilizers DAP and MAP (monoammonium phosphate), which combine the acid with ammonia. Combined DAP and MAP output is roughly 70 to 75 million tonnes a year. Because the recipe needs both sulphur (for the acid) and ammonia, phosphate is tied simultaneously to the oil and gas processing markets that produce sulphur and to the gas market that produces ammonia.

Phosphorus has no substitute: a plant deprived of it cannot grow, and nothing else does its job in a cell. That is why the geology matters so much. About 70 percent of the world's remaining phosphate-rock reserves sit in one area, Morocco and the disputed Western Sahara, which keeps reviving fears of "peak phosphorus" and makes a humble fertilizer mineral a long-run question of food security.

How the rock got there explains where it sits. More than 90 percent of mined phosphate is marine sediment, and it forms much as oil source rock does. Where ocean currents lift cold, nutrient-rich deep water onto a continental shelf, plankton and fish multiply, and their remains, bones, teeth and droppings settle onto the seabed. As bacteria break that organic matter down in the mud, the phosphorus it releases crystallises as the mineral apatite, and currents winnow away the lighter sediment to leave phosphate-rich beds. The difference from oil is what survives: oil is the organic matter itself, cooked by heat and pressure, while phosphate is the mineral left behind as that matter decays. Sometimes it is the same rock. Idaho's Phosphoria Formation, about 270 million years old, is mined for phosphate and is also the source rock that the USGS estimates generated more than 225 billion barrels of oil across the northern Rockies. Morocco's deposits were laid down in a shallow sea on its Atlantic margin from the latest Cretaceous to the early Eocene, roughly 70 to 48 million years ago, which is why the Khouribga mines are among the richest fossil beds on earth for sharks, marine reptiles and pterosaurs. Florida's Bone Valley is younger and famous for megalodon teeth. The rest of world supply is igneous apatite crystallised from magma, mined on Russia's Kola Peninsula, at Phalaborwa in South Africa and at Siilinjärvi in Finland, and the Nauru story on this page is the same process in miniature: seabird droppings soaking into coral limestone and turning it into phosphate rock.

Running out is not the risk. The US Geological Survey puts world reserves near 73 billion tonnes against mine output of about 250 million tonnes a year, close to three centuries at today's rate, with identified resources above 300 billion tonnes; Morocco's own 50 billion tonnes would last well over a thousand years at its current output. The peak-phosphorus scare of the late 2000s, which forecast a peak around 2033, largely faded after 2010, when Morocco's reserve estimate was raised roughly ninefold. The risk is concentration, and it grows with time: today's mining is spread out, with China about 44 percent, Morocco 14, the United States 8 and Russia 6, but as other countries' mines deplete, more of the world's phosphate will have to come from Morocco. Part of that reserve lies in Western Sahara, which the Polisario independence movement claims; in 2017 a South African court detained a Moroccan phosphate cargo in transit and the following year ruled that it belonged to the Polisario, and most countries still do not recognise Moroccan sovereignty there, although the United States did in 2020. Morocco itself has been one of the most stable states in the region, with OCP run as a national champion, so a supply break is a long-run tail risk rather than a near one. China has already shown what a cutoff looks like: by holding back exports from 2021, and more firmly from 2023, the world's largest producer pushed DAP prices up and sent buyers to Morocco, Saudi Arabia and Russia, which deepened the dependence on Morocco. Phosphorus has no substitute, so the only answers are other supply, from new mines in Saudi Arabia, Brazil, Kazakhstan and Russia and from recovering phosphorus from sewage and manure, or using less, since much of what is spread washes into rivers rather than feeding the crop.

Supply is geologically concentrated. Morocco's state producer OCP sits on the majority of the world's phosphate rock reserves and is the dominant exporter, selling DAP and MAP to Europe, Brazil, India, and beyond. China is a huge producer too, but Beijing curbed phosphate exports from 2023 onward to protect domestic supply and to keep rock for its booming lithium iron phosphate (LFP) battery industry, which competes for the same purified phosphoric acid. Those Chinese curbs, more than any single demand surge, drove DAP higher through 2024 and 2025. The United States (Mosaic), Russia (PhosAgro), and Saudi Arabia (Ma'aden) round out the major exporters.

Prices have climbed steadily. The World Bank's fertilizer index rose in 2025 with DAP among the leaders, OCP selling December cargoes around 680 to 685 dollars FOB and January cargoes to Europe at 750 to 760 dollars CFR. The 2026 Strait of Hormuz crisis added a sulphur and ammonia squeeze on top, since Gulf refining and gas processing supply much of the world's sulphur, lifting DAP through the spring: India's state buyer secured more than a million tonnes at around 930 to 935 dollars a tonne CFR in May 2026, with OCP cargoes netting back to the high 800s FOB Morocco. Sulphur was the input that moved most. A tonne of DAP takes about 0.4 tonnes of sulphur, so at 2024 prices under $100 a tonne it added less than $40 to the cost of a tonne of DAP, and at over $1,000 in mid-2026 it added about $400, roughly half the DAP price. Chinese DAP plants fell to about 30 percent of capacity in June, Mosaic cut about two million tonnes of output, and Ma'aden's phosphate earnings fell by half in the second quarter. New OCP capacity targeted for later in the decade should eventually ease the tightness.