Phosphoric acid: Cycles

Grain prices, Indian subsidies and Chinese export curbs

What this tab covers How its prices and margins move: past booms and busts with price levels, the spread or margin that the industry watches, the drivers of the cycle and the metrics to track.

Phosphoric acid prices follow DAP, which follows grain prices, Indian subsidy decisions and Chinese export policy, while costs follow sulphur and ammonia. India's quarterly contract is the main public benchmark. Prices peaked in 2008 and again in 2022, fell in between, and rose again in 2026 when the Hormuz near-closure lifted sulphur and ammonia. The floor is the cash cost of integrated producers; the ceiling is set by India's subsidy budget, which limits what Indian buyers can pay before cutting imports.

The spread to watch Acid price minus rock and sulphur cost

Margin per t P2O5 = acid price - 3.3 x rock price - 0.9 x sulphur price - conversion (indicative). At Q3 2026 acid of $1,700 and sulphur at $1,000/t FOB Ruwais (ADNOC July 2026), sulphur alone cost about $900 per t P2O5, squeezing non-integrated producers.

Booms and busts

2007-2008
Food price boom, Chinese export curbs and a sulphur spike drove record fertiliser prices before the financial crisis.
India contract peaked at about $2,310/t P2O5 in 2008 (indicative, industry reporting)
2021-2022
Post-Covid demand, Chinese export restrictions and the Russia-Ukraine war lifted sulphur, ammonia and DAP.
India contract about $1,700/t P2O5 in mid-2022 (indicative)
2026
Hormuz near-closure, China's acid export halt and higher ammonia costs pushed contracts up each quarter.
CFR India $1,290/t P2O5 (Q1 2026), $1,360/t (Q2) and $1,700/t (Q3) (Argus; Fertilizer Daily)

What drives the cycle

Sulphur and ammonia prices. Sulphur is the main variable cost of acid; ammonia sets DAP conversion cost and therefore what buyers can pay for acid.
Indian subsidy and DAP demand. India's Nutrient Based Subsidy rates decide how much DAP and acid India imports each season.
Chinese export policy. Chinese quotas on DAP and MAP exports swing world supply.
Crop prices. Grain and oilseed prices set farmers' ability to pay for phosphate.
LFP battery demand. A new, growing outlet for purified acid that competes with fertiliser for rock and sulphur.

Metrics to track

Metric	Why it matters	Where to track it
Phosphoric acid CFR India quarterly contract	Main public benchmark	Argus; CRU; Fertilizer Daily
DAP CFR India and FOB Morocco	Product value	Argus; World Bank Pink Sheet (DAP)
Sulphur CFR India and FOB Middle East	Main cost	Argus; Platts
India DAP stocks and NBS rates	Demand signal	Department of Fertilizers