Material Insights · Understanding the Material World

Phosphate rock and Potash

Phosphate and potash are the P and K of fertiliser: almost all of both goes to farms, neither has a substitute as a plant nutrient, and India buys both mostly from abroad under one subsidy scheme, so their demand and policy move together even though their mines are in different countries.

Phosphate rock (commodity) and Potash (commodity): 5 relationships.

How they are linked

1. Same buyer: the fertiliser sector

Shared risk · Strong · Both sold mainly to fertiliser makers and farmers

Nearly all mined phosphate rock and potash ends up as fertiliser, and USGS lists no substitute for either nutrient in farming, so both depend on planted area and on what farmers can afford.

  • over 95% US phosphate rock turned into wet-process phosphoric acid, 2025
  • about 85% US potash sales used by the fertiliser industry, 2025

Farmers apply the two together, either in complex NPK grades or as separate DAP and MOP, so a good monsoon or a subsidy change lifts both. The link breaks when farmers cut one nutrient alone: Indian MOP sales in 2023-24 were 1.88 Mt, still about 40% below 2020-21, showing that farmers can cut potash on its own.

Sources: USGS; USGS; Business Standard

2. Price link: co-applied nutrient

Cost and price · Medium · Both ways

Both prices follow crop affordability and the overall fertiliser cycle, but the mines, producers and export politics are different, which keeps the tie moderate.

  • 0.25 monthly change correlation
  • 0.60 12-month change correlation
  • 0.57 fitted elasticity

Month to month the two series barely move together, but over a year they share the same fertiliser cycle, with no clear lead or lag. Potash supply rests on Canada, Russia and Belarus while phosphate rests on China and Morocco, so a shock at one set of mines can move one price without the other.

Sources: USGS; USGS; Material Insights (World Bank, FRED, IMF data)

3. One Indian subsidy for P and K

Policy · High in India · India's Nutrient Based Subsidy sets the farm price of both

India's Nutrient Based Subsidy pays a fixed rate per kilogram of nitrogen, phosphorus, potassium and sulphur in decontrolled fertilisers, so the government resets the economics of P and K together every season.

  • Rs 37,952 crore NBS budget for rabi 2025-26
  • 28 grades of P and K fertiliser covered
  • 9.8:3.7:1 India's N:P:K use ratio, kharif 2024, against an ideal of 4:2:1

The rabi 2025-26 rates were set after reviewing world prices of urea, DAP, MOP and sulphur. The use ratio improved from 10.9:4.9:1 in kharif 2023 but still shows potassium and phosphorus applied far below the agronomic ideal relative to nitrogen, so the relative subsidy on P and K is a lever for soil balance as well as farm costs.

Sources: Press Information Bureau, Government of India; Business Standard

4. India imports most of both

Shared risk · High in India · Indian farms depend on foreign P and K

India has no commercial potash and only small phosphate rock output, so both nutrients reach Indian farms mainly as imported rock, acid or finished fertiliser.

  • 100% India's potash (MOP) needs met by imports
  • about 90% India's import dependence for rock phosphate, 2021
  • 53% share of India's DAP requirement met by imports, 2023-24

India mined about 1.5 Mt of phosphate rock in 2025 against 110 Mt in China, and Morocco holds about 50 of the world's 73 billion tonnes of reserves. Potash output is concentrated in Canada (about 15 Mt K2O in 2025), Russia (10 Mt) and Belarus (6 Mt), so Indian supply of both depends on a handful of exporting countries.

Sources: USGS; USGS; Dataful; Press Information Bureau, Ministry of Chemicals and Fertilizers; CareEdge Ratings

5. Russia and China in both

Geography and ownership · Medium · Shared producing countries

Russia and China are large producers of both nutrients, so trade measures affecting either country can tighten phosphate and potash at the same time.

  • 14 Mt and 10 Mt Russia's phosphate rock and potash (K2O) output, 2025
  • 110 Mt and 6.3 Mt China's phosphate rock and potash (K2O) output, 2025

The overlap is partial: Canada and Belarus matter only for potash, and Morocco and Jordan only for phosphate. Buyers can diversify one nutrient without touching the other, but a shock involving Russia reaches both.

Sources: USGS; USGS

For investors

Key learnings

  1. Nearly all phosphate rock and potash ends up as fertiliser with no substitute nutrient, so both follow crop area and farm affordability, although Indian MOP sales show farmers will cut potash on its own when it gets dear.
  2. In India the farm price of both is a policy decision taken each season under the Nutrient Based Subsidy, so subsidy rates matter as much as world prices for importers' margins.
  3. Supply risks differ: potash hinges on Canada, Russia and Belarus, phosphate on China and Morocco, so the yearly price link is only moderate.

What to track

  • NBS per kg rates for P and K each season: Higher rates protect importer and maker margins and support offtake of DAP, NPK and MOP (Twice a year · PIB and Department of Fertilizers)
  • India MOP and DAP import contract prices: Set landed cost for both nutrients and signal subsidy pressure (Per contract · Indian Potash Ltd and trade press)
  • Monthly MOP, DAP and NPK sales in India: Shows whether farmers are cutting K or P when prices rise (Monthly · Department of Fertilizers)

For policymakers

Key learnings

  1. India depends on imports for all of its potash and most of its phosphate, so fertiliser security rests on a few exporting countries.
  2. Because P and K are subsidised in one scheme, the relative rates shape whether farmers move towards the 4:2:1 nutrient balance.
  3. Russia is a large producer of both, so one sanctions or trade shock can hit both nutrients together; buying potash from Canada and phosphate from Morocco and Jordan spreads that risk.

What to track

  • All-India N:P:K use ratio: Progress towards balanced fertilisation against the 4:2:1 benchmark (Each season · Fertiliser Association of India)
  • Import share of rock phosphate, DAP and MOP: Exposure of farm supply to foreign producers (Yearly · Department of Fertilizers)

India

India imports all its potash and about 90% of its rock phosphate, budgeted about Rs 37,952 crore of P and K subsidy for rabi 2025-26 alone, and its nutrient use ratio of 9.8:3.7:1 in kharif 2024 stays far from the 4:2:1 ideal.

Sources

  1. Mineral Commodity Summaries 2026: Phosphate rock, USGS (2026)
  2. Mineral Commodity Summaries 2026: Potash, USGS (2026)
  3. Price correlation, Material Insights, Material Insights (World Bank, FRED, IMF data)
  4. Cabinet approves Nutrient Based Subsidy rates for Rabi 2025-26 on phosphatic and potassic fertilisers (PIB release, copy), Press Information Bureau, Government of India (2025)
  5. As DAP sales squeezed, farmers opted for more beneficial NPKs, shows data, Business Standard (2024)
  6. Import reliance and supply risks challenge India's fertiliser security, Dataful (2025)
  7. Action plan for fertiliser self-reliance (PIB release), Press Information Bureau, Ministry of Chemicals and Fertilizers (2021)
  8. Fertiliser sector report, CareEdge Ratings (2024)