Phosphoric Acid Prices Surge 25% as India's Sulfur Rally Drives Up Fertilizer Input Costs

In a closely watched bilateral agreement, India's Coromandel International and Jordan's JPMC (Jordan Phosphate Mines Company) have finalised phosphoric acid supply terms for the third quarter at $1,700 per tonne P₂O₅ on a CFR basis. The settlement marks a significant step-up of $340 per tonne — or 25% — compared with the $1,360/t level agreed for the previous quarter.

Such benchmark deals between major buyers and producers carry outsized significance for India's fertiliser market, as they set the reference price against which a large share of the country's phosphoric acid imports are priced. Coromandel is among India's largest integrated phosphate fertiliser manufacturers, making its procurement terms a reliable barometer for the broader industry's input cost trajectory.

The dramatic escalation in phosphoric acid prices cannot be understood without examining the sulfur market. Sulfur is an essential raw material in the production of sulfuric acid, which in turn is reacted with phosphate rock to manufacture phosphoric acid.

In India, sulfur prices have skyrocketed by 49% in a single quarter, according to market reports, pushing raw material costs sharply higher for the entire phosphate fertiliser manufacturing chain. This rapid inflation in a key upstream input has left producers with little room to absorb cost increases, forcing them to pass on the burden through elevated phosphoric acid settlement prices.

The scale of the sulfur spike — nearly half again as expensive as the previous quarter — underscores how tightly linked global commodity markets remain, and how a surge in one feedstock can cascade rapidly across the fertiliser value chain.

Phosphoric acid is the indispensable input for both DAP (di-ammonium phosphate) and MAP (mono-ammonium phosphate) — the two phosphatic fertilisers most widely applied across Indian farms. With phosphoric acid prices now firmly higher for Q3, production costs for these critical nutrients are set to remain elevated in the months ahead.

The timing is notable: nitrogen fertiliser markets have been experiencing a softening trend globally, which might ordinarily have provided some relief to blended fertiliser costs. However, the sulfur-driven surge on the phosphate side is offsetting any such benefit, keeping overall nutrient input costs under pressure.

Key implications for the Indian market:

• Fertiliser manufacturers face compressed margins unless they can pass on costs downstream
• Government subsidy outgo under nutrient-based schemes may come under renewed scrutiny
• Traders and importers of finished DAP and MAP will need to factor in sustained cost elevation when planning Q3 procurement

With the Q3 phosphoric acid benchmark now set and sulfur markets showing little sign of a near-term reversal, the pressure on procurement strategies across the value chain is real. Market participants — from large fertiliser producers to regional importers and commodity traders — will need to reassess both timing and volume strategies for the remainder of the year.

The sulfur price trajectory remains the key variable to monitor. Any moderation in sulfur costs would feed through to softer phosphoric acid settlements in Q4 negotiations, offering potential relief. Until then, the combination of high sulfur prices and an elevated Q3 benchmark is expected to keep phosphate fertiliser input costs firm, with downstream consequences for farm-gate fertiliser prices across India.