�鶹ԭ��

In the second article,��Global Agrochemical Trade Overview, we have seen that Brazil, India, and the United States led global fertilizer imports by value during 2021–2023, while China (largely self-sufficient), India, the U.S., and Brazil stood out as the world’s top agrochemical consumers. In this blog article, we will extensively discuss the impact of tariffs and trade practices on the global agrochemical market.

The period from 2018 to 2024 saw unprecedented upheavals in the global trade of agrochemicals – notably fertilizers and pesticides – driven by trade wars, tariffs, export bans, and sanctions. Major policy actions like the U.S.–China trade conflict, American tariffs on Chinese pesticide ingredients, U.S. duties on foreign fertilizers, China’s export restrictions, and sanctions on Russia and Belarus have reshaped supply chains. This business-oriented analysis examines how these measures disrupted traditional trade flows, prompted shifts in sourcing strategies by agricultural economies, and escalated costs for farmers and downstream industries worldwide. Below, we break down the key developments and their impacts on global agrochemical markets.

U.S.–China Trade War Disrupts Agrochemical Trade

In 2018, the United States launched a trade war with China that would significantly affect chemicals and agricultural chemicals. As part of Section 301 tariffs, the U.S. imposed additional duties of 25% on 113 types of Chinese pesticide technical ingredients and 7.5% on 18 other pesticide chemicals. These tariffs targeted the active ingredients and formulated products that American agribusinesses import from China, which is the world’s largest pesticide producer. In retaliation, China levied its own tariffs on U.S. agricultural and chemical products​. The immediate effect was higher input costs and squeezed margins for agrochemical distributors and farmers in the U.S., as Chinese-made insecticides, herbicides, and fungicides became more expensive. Chinese exporters also saw their U.S. market share erode.

However, the global pesticide trade quickly adapted. Anticipating tariffs, U.S. importers front-loaded purchases from China in 2018–2019, causing China’s pesticide exports to the U.S. to spike in 2019 before the tariffs fully bit​. After 2019, Chinese volumes to the U.S. declined, yet they remained above pre-trade war levels as some trade continued under the higher tariffs. Meanwhile, other suppliers stepped in to fill the gap. India, in particular, expanded its role as an alternative source of agrochemicals for the U.S. market. Indian pesticide exports to the United States saw significant growth in recent years, partially making up for reduced Chinese supply​. This shift was fostered by Indian chemical companies’ ability to produce generic crop protection chemicals at competitive costs. American importers diversified suppliers, sourcing more from India and other countries in Southeast Asia to mitigate the China tariff exposure.

Trend of U.S. pesticide imports from China (red) vs. India (green), 2015–2024. Chinese exports to the U.S. peaked in 2019 as buyers stockpiled before tariffs, then declined under tariffs. Indian exports rose steeply after 2018, filling part of the void in U.S. supply​.

The U.S.–China tariff war thus triggered a restructuring of global pesticide supply chains. China remains a major player but is now focusing on other markets and higher-value products, while countries like India have grown their market share in supplying key pesticide ingredients to major agricultural economies. What began as bilateral trade measures has had wider ripple effects: global agrochemical firms have reorganized production footprints, and both Chinese and Western companies have invested in alternate manufacturing hubs to diversify risk. This new complexity in the agrochemical trade landscape is a direct outcome of the tariff-induced cost pressures and supply chain realignments.

U.S. Tariffs Target Fertilizers: Phosphates from Morocco and Russia

Trade protectionism also hit the fertilizer sector. In 2020, the U.S. Department of Commerce initiated investigations into phosphate fertilizer imports from Morocco and Russia, following complaints that foreign producers were unfairly subsidized. By early 2021, the U.S. imposed steep countervailing duties (CVD) on these imports. Morocco’s state-owned OCP, a leading phosphate supplier, was hit with about a 20% duty on phosphate fertilizers, and Russian producers faced duties ranging roughly from 9% to as high as 47% for one producer. These tariffs aimed to protect the domestic fertilizer industry (notably U.S. producer Mosaic Co.) but had immediate consequences for trade flows and prices.

Morocco had been the United States’ top foreign source of phosphate fertilizers, exporting over 2 million metric tons to the U.S. in 2019. Once the 19.97% import duty kicked in, Moroccan exports to the U.S. plummeted – OCP effectively stopped shipments to the U.S. after 2021​ rather than incur the tariff. The loss of Moroccan supply (and reduced Russian imports) meant the U.S. had to turn elsewhere for phosphates. In the short term, this created a tighter domestic market. By 2022, virtually all U.S. phosphate imports came from a handful of alternate suppliers like Peru and Jordan, but volumes were lower​. With less competition from imports, U.S. phosphate fertilizer prices climbed sharply. Farmers and industry groups complained that the tariffs “are the last thing farmers need,” given already high input costs​.

The data bear out these concerns. Phosphate fertilizer prices in North America shot up during 2021–2022. In fact, a composite index of U.S. fertilizer prices hit an all-time high by March 2022, exceeding even the 2008 price spike. While multiple factors drove the 2022 fertilizer price shock (as discussed later), trade policies like the phosphate tariffs exacerbated the surge. The cost impact on U.S. farmers was substantial – one analysis estimated that if a 25% import tariff were fully passed through, it could add over $100 per ton to potash or phosphate fertilizer prices​. Fertilizer is a major expense for growers, comprising roughly 36% of U.S. corn production operating costs and 35% for wheat​. Thus, the phosphate duties – by curbing low-cost imports – directly translated into higher expenses at the farm level.

It is notable that by late 2023, trade authorities revisited these tariffs. The U.S. Court of International Trade ordered a review, and tariffs on Moroccan phosphate were briefly lowered to 2% in 2023, prompting OCP to resume some shipments. However, as of 2024 the policy environment remains volatile, with prospects of tariff adjustments causing uncertainty​. The episode underscores how trade interventions in fertilizers can boomerang – protecting domestic producers but raising costs downstream and forcing importers to seek new sourcing (in this case, turning to countries like Saudi Arabia or alternative suppliers to replace Moroccan and Russian product).

China’s Fertilizer Export Bans Strain Global Supply

Even as Western nations restricted imports, China – a top fertilizer exporter – began restricting exports. Starting in late 2021, Beijing implemented measures to curb the outflow of key fertilizers (such as urea, DAP, and MAP) to ensure domestic availability and tame rising domestic prices. These measures included export quota controls, licensing requirements, and increased inspections that effectively acted as export bans in some cases​​. China is the world’s largest phosphate fertilizer exporter and a major supplier of urea, so its policy shift had global repercussions.

The impact was immediate: Chinese fertilizer exports plunged. Urea exports from China fell by 24% in 2022 (to about 2.8 million tons) compared to the year prior​. Phosphate (DAP/MAP) exports also dropped significantly as authorities throttled shipments to keep more fertilizer at home. By the first half of 2023, China’s urea exports were down a whopping 58% year-on-year, and its phosphate exports were about 60% lower than a year before​​. Effectively, China removed millions of tons of fertilizers from the world market at a time when supplies were already tight. This contributed to a global supply squeeze that pushed fertilizer benchmark prices to multi-year highs. For example, diammonium phosphate (DAP) prices surged throughout 2021, reaching around $745/ton by end of that year (roughly double the price at the start of 2021)​.

Importing countries, especially in Asia, had to scramble. Major fertilizer buyers like India, Vietnam, and Malaysia turned to alternative suppliers when Chinese cargos failed to arrive​. India – one of the largest fertilizer consumers – saw its imports from China drop sharply and responded by boosting purchases from countries like Russia, Oman, and the UAE​. For instance, as Chinese urea supply dwindled, India increased urea imports from suppliers in the Middle East and even Russia to compensate​. Southeast Asian importers similarly sought phosphates from Morocco, Egypt, and other exporters instead of China. This diversification was necessary but often came at higher cost, since non-Chinese suppliers often charged more. Industry observers noted that China’s unpredictable interventions made it an “unreliable supplier” and forced buyers to diversify sources despite the higher prices​.

By late 2022 and into 2023, fertilizer prices finally started easing as some of China’s restrictions were relaxed and new capacity came online elsewhere. China did modestly resume exports in 2023, increasing its shipments to destinations like Brazil and India compared to the lows of 2022 (for example, China’s share of Brazil’s DAP imports rebounded to 20% in 2023 after falling to 14% in 2022)​. Even so, China’s 2023 export volumes remained below pre-restriction highs​. The episode highlights how export controls by a key supplier can shock global markets: China’s internal policy to keep fertilizer prices low domestically effectively exported inflation to other countries in 2021–2022. Nations dependent on imported nutrients had to pay record-high prices on world markets or risk shortfalls in crop nutrition.

Russia and Belarus Sanctions Upend Global Fertilizer Flows

The Russia–Ukraine war in 2022 added a new and dramatic layer of disruption to global agrochemical flows. Russia was (and remains) one of the world’s top fertilizer exporters – in 2021, Russia accounted for about 16% of global nitrogen fertilizer trade, 12% of phosphates, and, together with ally Belarus, 40% of global potash exports​. When Russia invaded Ukraine in February 2022, a wave of sanctions and trade finance difficulties ensued. While most Western sanctions deliberately exempted fertilizers (to avoid exacerbating food insecurity), the war still severely disrupted fertilizer trade. Belarus, for its part, had already been hit by EU sanctions on potash in 2021 (due to political disputes), and those sanctions tightened after the Ukraine war. Additionally, the conflict led to logistical challenges – Belarus lost access to its usual export port in the Baltics, and Russia’s Black Sea export routes were constrained.

Global fertilizer supply took an immediate hit. For a few months in 2022, Russian exports were constrained by shipping insurers’ and banks’ caution, despite no formal U.S./EU ban on Russian fertilizer. Fertilizer prices that were already elevated skyrocketed to record levels in March 2022. Bloomberg’s Green �鶹ԭ��s Index of North American fertilizer prices hit 1,270 (2002=100) in late March 2022 – the highest ever recorded, surpassing the 2008 food crisis peak​. Spot prices for potash and nitrogen spiked 2-3x their 2021 levels. For example, the price of potash (MOP) jumped above $1,100/ton in 2022 (an April 2022 peak of over $1,200 in some markets)​. This price shock reverberated through global agriculture, raising production costs for major crops.

Global fertilizer price index (base Jan 2002 = 100) showing volatility from 2006–2022. Prices spiked dramatically in 2021–2022, with the index reaching an all-time high in March 2022 amid the Russia–Ukraine war disruptions​. Prices eased in late 2022 and 2023 but remained above pre-2018 levels.

After the initial turmoil, new trade patterns emerged in 2022–2023 to reroute Russian and Belarusian fertilizer supplies. Major agricultural economies that did not sanction Russia seized the opportunity to import cheaper Russian product. For instance, India dramatically increased its imports of Russian fertilizers – Russia’s share of India’s potash imports soared from only 4.4% in 2021 to about 29% in 2023​, as India bought potash and DAP from Russia at discounts. Russia also redirected exports to Turkey, Latin America, and Africa. Brazil, the world’s largest potash importer, maintained its reliance on Russia: Russia actually slightly increased its share of Brazil’s potash imports (to ~29% in 2023 from 27% in 2021)​ In contrast, Belarus, a major potash producer, saw its market shares fall in most destinations due to sanction barriers – for example, Belarus’s potash went from 18% of Brazil’s imports in 2021 to just 8% in 2023. However, Belarus was able to ship more to China via rail through Russia, resulting in China taking 29% of its potash from Belarus by 2023 (up from 22% in 2021. In short, Russia and Belarus pivoted eastward, sending more fertilizer to Asia (China, India) and less to the West.

Western importers also adjusted. European countries, facing reduced supply from Russia (especially for potash and ammonia), turned to higher-cost suppliers like Canada (for potash), Morocco (for phosphates), Saudi Arabia, Egypt, and the United States​. Canada – already the leading potash exporter – ramped up production and its share of global exports climbed in 2022, temporarily filling some of the gap. By 2023, Canada was providing nearly 88% of U.S. potash imports (even more than before) as U.S. buyers relied almost entirely on Canadian mines with Belarus out and Russian trade limited. European buyers, meanwhile, paid a premium to secure non-Russian ammonia and nitrogen fertilizer; many European fertilizer plants had cut output due to skyrocketing natural gas prices (another effect of the war). Thus, Europe’s fertilizer security in 2022 came at a high cost, importing from far-flung sources and even tolerating record prices to keep crops supplied.

By the end of 2023, the acute crisis had eased – global fertilizer trade volumes recovered as Russia found new customers and other producers expanded output. Remarkably, Russia’s overall fertilizer exports (nitrogen, potash, phosphate combined) in 2023 were actually higher than in 2021​, demonstrating the work-around of sanctions via trade diversion. However, this re-routing incurred efficiency losses: longer transport distances, new intermediaries, and sometimes processing changes (for example, Russia had to flaring ammonia or find alternate routes after a key pipeline through Ukraine was closed). The net effect of sanctions was a massive short-term price spike and a reorganization of trade flows rather than a permanent loss of Russian supply in the global market.

Sourcing Shifts and New Trade Routes Emerge

Facing these disruptions – tariffs on some suppliers, export bans, and sanctions on others – major agricultural economies adjusted their sourcing strategies between 2018 and 2024. A clear pattern of diversification and “reshuffling” of trade partners emerged, as countries sought to secure agrochemicals from more reliable or non-traditional sources.

• United States: In addition to tapping India for pesticides, the U.S. also looked to allies for fertilizer. After Moroccan and Russian phosphates became pricier due to duties, U.S. importers increased purchases from countries like Saudi Arabia and Mexico. Saudi Arabia’s Ma’aden phosphate company, for example, which was not subject to U.S. tariffs, gained a foothold in the U.S. market. By 2022, Saudi Arabia was exporting record volumes of phosphate and urea to the U.S. – Saudi urea exports to the U.S. hit a record $347 million in 2022​. Mexico, a NAFTA partner, also became a modest supplier of certain fertilizers (Mexico exported about $151 million in fertilizers to the U.S. in 2023, up significantly from previous years)​. Additionally, the U.S. tapped its domestic production and import from Canada for potash and ammonia to mitigate reliance on overseas sources.
• European Union: Europe prior to 2022 relied on Russia for nearly 25-30% of some fertilizer imports (especially ammonia and potash. Post-invasion, EU buyers shifted to countries like Morocco, Israel, Egypt, and Jordan for phosphates, and to Canada for potash. Morocco’s phosphate giant OCP diverted volumes that would have gone to the U.S. toward Europe and Brazil when the U.S. market imposed duties​. Saudi Arabia also supplied more phosphates to Europe. European companies also explored sourcing nitrogen fertilizers from the United States and Trinidad when Russian ammonia became hard to get. These shifts often meant higher freight costs and prices, but improved supply security in the face of sanctions.
• India: India, as a huge importer of fertilizers, leveraged diplomatic ties to secure supplies. It entered into agreements with Russia in 2022 to import discounted fertilizers, resulting in a surge of Russian DAP and NPK shipments to India. Simultaneously, India turned to Saudi Arabia, Oman, and Egypt for additional phosphates and ammonia when Chinese exports dried up and global prices spiked​. India also ramped up domestic production where possible and increased subsidies to shield its farmers from global price shocks. On the pesticide front, India actually benefited by exporting more to markets like the U.S. and Brazil as a substitute for Chinese supplies, reinforcing its role as a global agrochemical supplier.
• Brazil: Brazil navigated the fertilizer turmoil by maintaining trade with Russia (not joining sanctions) and boosting imports from Canada and Iran. In 2022 Brazil imported record amounts of potash from Canada (which expanded output to meet demand) and also received Russian product that was redirected from elsewhere. Brazil additionally explored domestic potash mining projects to reduce dependence. For nitrogen, Brazil looked to Middle Eastern suppliers and increased purchases of Russian nitrogen fertilizers as well. By late 2023, Brazil’s fertilizer supply was more diversified than before, though Russia remained a key partner for potash and nitrogen.

Across these examples, a common theme is “de-risking” through diversification. Import-dependent countries learned that over-reliance on any single foreign supplier – whether it be China for pesticides, or Russia/Belarus for fertilizer, or even the U.S. on Morocco – can be perilous when geopolitics intervenes. The 2018–2024 era forced agribusiness supply chain managers to build new relationships. Countries like Saudi Arabia and Egypt emerged as big winners, expanding their fertilizer exports to fill gaps (Saudi Arabia’s fertilizer exports jumped to around $4.7 billion in 2023, entering the top ranks globally). Likewise, India and Turkey capitalized on agrochemical manufacturing to serve markets that China or Western suppliers struggled to reach due to tariffs or sanctions. This realignment of market share is evident in trade statistics – e.g., Russia, Canada, and China were the top three fertilizer exporters by value in 2022, but Morocco and Saudi Arabia climbed quickly in the rankings by 2023. The global agrochemical supply chain became more multipolar as a result, with greater involvement of the Middle East, South Asia, and Latin America in roles traditionally dominated by a few major exporters.

Cost Impact on Farmers and Downstream Industries

All of these trade disruptions had a direct impact on costs for farmers and downstream food industries. In agriculture, fertilizer and crop protection chemicals are critical inputs, and their price volatility immediately affects farm profitability. During 2018–2024, farmers worldwide faced soaring input costs. For instance, U.S. farmers’ spending on fertilizer jumped to $35.8 billion in 2023 – a huge increase from prior years​. This was driven by the tariff-addled phosphate prices and the war-driven surge in nitrogen and potash prices. The American Farm Bureau noted that fertilizer prices became the number one issue for many farmers, as costs in some cases doubled between 2020 and 2022​. Likewise, Brazilian and Indian farmers saw higher fertilizer bills; the Indian government had to dramatically increase fertilizer subsidy outlays (into the tens of billions of dollars) to keep domestic fertilizer selling prices stable despite the import cost surge.

When farmers pay more for inputs like fertilizer, the effects can trickle through the economy. In some cases, farmers reduced application rates or left some land fallow to avoid unprofitable high input costs – potentially lowering crop yields. Downstream, higher costs of grain and oilseeds (due to expensive inputs) contributed to food price inflation. It was estimated that global food prices hit record highs in 2022, and while multiple factors were at play (energy costs, post-pandemic demand, etc.), expensive fertilizers were a contributing factor. One analysis pointed out that overall grocery prices in the U.S. climbed over 20% since early 2021, and the volatility in fertilizer markets – partly a result of trade policies – was one factor adding inflationary pressure​.

Industries reliant on agricultural outputs, such as food processors, biofuel producers, and livestock feed operations, also felt the pinch. For example, higher corn and soybean prices (reflecting higher cultivation costs) squeezed ethanol producers and meat producers. The margin pressure cascaded along the supply chain: from crop growers to feedlots to consumer goods companies. Some companies had to adjust production plans or pass on costs to consumers. In essence, trade wars and sanctions introduced inefficiencies and higher cost structures in the global agrochemical supply chain, the burden of which was shared by farmers (through lower margins), governments (through subsidies or emergency measures), and end-consumers (through food inflation).

At the same time, these challenges spurred some adaptive responses. Agribusiness firms and farmers started adopting efficiency-enhancing practices like precision fertilizer application to get more output per unit of input when fertilizers became extremely expensive​. There was also renewed interest in biological alternatives (nitrogen-fixing microbes, etc.) and in expanding domestic fertilizer production in various countries to reduce reliance on imports. While these are longer-term adjustments, they underscore how a period of trade-induced volatility can catalyze innovation and changes in behavior downstream.

Conclusion

Between 2018 and 2024, global agrochemical flows were profoundly influenced by trade policy conflicts and geopolitical events. Tariffs from the U.S.–China trade war and U.S. duties on fertilizers reconfigured who buys from whom, as seen by India’s rising role in the U.S. pesticide market and shifts in U.S. phosphate import sources. Export restrictions – exemplified by China’s curbs on fertilizer exports – tightened global supply and forced buyers to seek new suppliers at higher cost. Sanctions on Russia and Belarus, coupled with the Ukraine war, initially shocked the fertilizer market with record prices, but eventually led to new trade routes (Russia to India/Latin America, Canada to U.S./EU, etc.) to keep nutrients flowing. Major agricultural economies responded by diversifying suppliers and investing in supply chain resilience, though not without growing pains and higher expenses.

From a business perspective, the lesson is clear: the agrochemical supply chain is highly globalized and sensitive to policy shocks. Trade wars and sanctions can redraw trade maps overnight, favoring those agile enough to fill gaps. Companies in regions like the Middle East and South Asia capitalized on opportunities to increase market share when traditional trade was impeded. Farmers and agribusinesses, however, bore increased costs as a consequence of these disruptions. The historical record of 2018–2024 will inform future decisions – whether in trade negotiations or sourcing strategies – as stakeholders seek to balance national interests with the need for stable, affordable agrochemical supplies in an interconnected world.

Sources: The analysis above is based on data from government and international sources, including U.S. Department of Commerce trade determinations ​, USDA and farmdoc analyses​, FAO/World Bank commodity price tracking, WTO trade statistics, and industry reports. It also incorporates insights from IFPRI and Reuters on fertilizer trade shifts​, and contemporary news coverage of policy actions and market reactions between 2018 and 2024. All numerical figures and quotes are cited from these reputable sources to ensure accuracy and verifiability.

Next Article:��Global Realignments in the Agrochemical Supply Chain (2023–24) and beyond