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Phosphate supplies questioned as conflict continues to disrupt global market

The founder and CEO of Keytrade AG, a global fertilizer trading company based in Switzerland, says the conflict in the Middle East continues to disrupt global fertilizer markets.

“I find it hard to believe that we will go back to normal. There will be a new normal.”

Melih Keyman says a missile attack on a natural gas transport on Tuesday in the Strait of Hormuz means the availability of about a third of the world’s globally traded urea and nearly half of its sulfur remains questionable at best.  

“The most imminent phosphate application is in Brazil for the safrinha season, and then we are going into our fall season.”  He says, “I do not believe that physically the world has enough phosphates to meet the demand.”

However, he tells Brownfield high prices are likely to balance that demand.

“Who is going to buy $900 MAP or DAP?”  He says, “So, what’s the situation of the soil? I believe the growers may reduce application.”

Keyman says it’s not likely that any reduced demand will translate to lower phosphate prices for farmers since sulfur prices, which is a primary fertilizer ingredient, continue to run at least three times higher than average driving up cost of production.

AUDIO: Melih Keyman – Keytrade AG