Ammonium Sulphate Prices Surge 25-35% as Geopolitical Conflict Disrupts Global Fertilizer Trade

The global ammonium sulphate market has experienced significant price volatility through the first half of 2026, with prices surging between 25% and 35% across key grades following the escalation of the USA-Israel-Iran conflict and the disruption of critical maritime trade corridors. Supply chain disruptions, elevated energy and feedstock costs, and shifting global procurement strategies have combined to create one of the most volatile periods in recent memory for the nitrogen fertilizer market.

The Conflict Catalyst: Strait of Hormuz Disruption

The escalation of the USA-Israel-Iran conflict on February 28, 2026 became the defining market event of the year for global fertilizer trade. The temporary disruption of shipping through the Strait of Hormuz, a corridor handling a substantial share of global fertilizer and energy trade, triggered severe shipping delays and sharply increased freight and insurance costs across supply chains.

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The knock-on effects were rapid and significant. Brent crude surged above $109 per barrel by May 2026, directly inflating production costs for ammonia, sulfur, and other key fertilizer feedstocks. For ammonium sulphate specifically, these upstream cost pressures translated into immediate price escalation across global spot and contract markets.

China Price Movement: Pre- vs. Post-Conflict

The scale of the price shift is most clearly illustrated through China's ammonium sulphate market, one of the world's primary export sources for the grade.
Prior to the conflict escalation in late February 2026, China's market was stable. Standard Caprolactam Grade ammonium sulphate was assessed at USD 175-185 per metric tonne, with Granular Caprolactam Grade trading at USD 185-195 per metric tonne.

Following the outbreak of conflict and the subsequent disruption to global fertilizer logistics and feedstock supply chains, prices surged sharply by late March. Standard Caprolactam Grade rose to USD 230-240 per metric tonne, while Granular Caprolactam Grade climbed to USD 240-250 per metric tonne, representing an overall increase of approximately 25-35% across both grades.

Substitution Demand Amplifies Price Pressure

A parallel demand dynamic has reinforced the upward price trend. As nitrogen and phosphate fertilizer prices surged globally, urea and DAP among them, farmers across South America, North America, and Australia increasingly shifted toward ammonium sulphate as a cost-effective alternative. This substitution-driven demand has provided additional structural price support, compounding the supply-side pressures already in play.

India Moves to Secure Supply Ahead of Kharif Season

India's response to the tightening global supply environment has been decisive. Indian Potash Limited (IPL) issued a large import tender for 300,000 metric tonnes of Caprolactam Grade ammonium sulphate to secure domestic supply ahead of the Kharif planting season and limit exposure to further price escalation. The move underscores the degree to which national procurement agencies are treating fertilizer security as a strategic priority in the current geopolitical environment.

China's Export Exemption: A Stabilizing Factor

While China moved to restrict exports of several fertilizers, including NPK fertilizers and ammonium chloride, to stabilize domestic prices during its spring planting season, ammonium sulphate was notably exempt from these restrictions.

Because it is primarily produced as a by-product of caprolactam and coke manufacturing rather than as a dedicated fertilizer output, China was able to maintain active export flows during the period of global supply disruption. This exemption has provided a degree of international availability that other fertilizer grades have lacked, partially offsetting the broader tightening of global trade flows.

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Market Outlook: 2026-2027

The trajectory of ammonium sulphate prices through the remainder of 2026 and into 2027 will be closely tied to geopolitical developments and energy market conditions.

In a scenario where the Strait of Hormuz reopens promptly, prices may gradually ease as fertilizer and feedstock supply chains normalize. If geopolitical tensions persist, however, prices are expected to remain firm, underpinned by elevated ammonia, sulfur, and freight costs. Under an extended conflict scenario, the most bearish supply outlook, global fertilizer shortages could intensify materially, potentially pushing Chinese FOB ammonium sulphate prices above USD 340-365 per metric tonne.

Overall, the ammonium sulphate market is expected to remain highly sensitive to geopolitical risk, energy price movements, and global fertilizer trade policy developments throughout 2026 and beyond.

About Price WatchTM

Price WatchTM is a real-time commodity price intelligence platform delivering expert analysis and deep market insights across key agricultural input markets. Its ammonium sulphate coverage spans India and China, with weekly price assessments available from 2015 onwards, short-term forecasts, and detailed downloadable market reports.

PriceWatchTM tracks ammonium sulphate prices across India and China on a weekly basis, with historical data from 2015, short-term price forecasts, and detailed market reports available for download.

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Price-WatchTM is an India-based, independent raw material price reporting agency that provides real-time price forecasts and data-driven insights into global raw material markets. Price-Watch AI specializes in tracking raw material prices, analyzing market trends, and delivering timely updates on plant shutdowns, supply disruptions, capacity expansions, and demand-supply dynamics. The Price-Watch AI platform empowers manufacturers, traders, and procurement professionals to make faster, smarter decisions. Leveraging AI-powered forecasting and over a decade of historical data, Price-Watch AI transforms market volatility into actionable opportunity.

This release was published on openPR.