Market and product

Introduction to DAP and Its Role in Modern Agriculture

Diammonium phosphate (DAP), with the chemical formula (NH₄)₂HPO₄, is a high-efficiency fertilizer widely used in modern agriculture. DAP contains 18% nitrogen (N) and 46% phosphorus pentoxide (P₂O₅), equivalent to approximately 20% elemental phosphorus, making it one of the most phosphorus-rich fertilizers on the market.

The product is created through a reaction between phosphoric acid (H₃PO₄) and anhydrous ammonia (NH₃), resulting in a crystalline or granular compound that is water-soluble with a slightly alkaline pH (7.5-8.0). This characteristic makes DAP particularly suitable for acidic or neutral soils.

According to recent studies, DAP can increase agricultural yields by 30% to 50% in intensive farming systems. The importance of DAP lies not only in improving yields but also in influencing crop quality by increasing protein and carbohydrate content in grains.

Global DAP Market Structure

High Concentration in Production and Exports

The global DAP market is characterized by high concentration among a few key producing countries. Five nations - China, Morocco, Saudi Arabia, Russia, and Jordan - control approximately 80% of global DAP/MAP exports. Specifically, these five countries accounted for 86.17% of global exports in 2021.

The global phosphate fertilizer market, including DAP, reached $67.04 billion in 2024 and is projected to grow to $93.89 billion by 2031, with a compound annual growth rate (CAGR) of 4.3%. Global DAP demand is forecast to reach 18 million tonnes by 2025, driven by population growth and agricultural intensification in regions such as Asia and sub-Saharan Africa.

Major Producers and Exporters

China leads the market with approximately 4.6 million tonnes of DAP exports, accounting for about 35% of total global production and 30% of exports. In 2021, China exported 37.65% of global DAP (6.25 million tonnes). However, this figure declined to 6.6 million tonnes in 2024 due to internal restrictions.

Morocco holds 70% of the world's phosphate rock reserves with approximately 50 billion tonnes. The OCP Group (Office Chérifien des Phosphates) controls 31% of the global phosphate market. Morocco's phosphate exports increased by 54.8% in 2022, generating €10.3 billion. Morocco exports 3 million tonnes of DAP, accounting for approximately 20% of global exports.

Saudi Arabia is emerging as a significant producer through the Ma'aden company, with a DAP production capacity of 3.6 million tonnes per year at the Ras Al-Khair industrial complex. Saudi Arabia accounts for 11% of production and 20% of global exports, with a particularly high CAGR of 166% since 2013.

Russia is the world's third-largest phosphate producer, with an estimated output of 3.7 million tonnes of phosphorus (P₂O₅) in 2023. Companies such as PhosAgro, EuroChem, and Acron lead DAP production. In 2024, Russia's DAP production reached approximately 4.5 million tonnes, accounting for about 10% of global production and 12% of international trade with 3.2 million tonnes of exports.

Jordan has phosphate reserves of approximately 1.25 billion tonnes, making it the world's sixth-largest producer. The Jordan Phosphate Mines Company (JPMC) operates mines and processing plants with a capacity of approximately 650,000 tonnes of DAP per year at the Aqaba complex. Jordan contributes about 5-7% of the global DAP market.

Energy Factor: The Critical Role of Natural Gas

DAP production heavily depends on natural gas, the primary raw material for producing ammonia (NH₃) - one of the two basic components of the fertilizer. Ammonia is industrially produced using the Haber-Bosch process, which combines nitrogen (N₂) from air with hydrogen (H₂) obtained from methane (CH₄) in natural gas.

Natural gas serves a dual purpose: as a raw material (hydrogen source) and as a thermal energy source for related chemical processes. The price and availability of natural gas directly affect DAP production costs.

Countries with abundant gas reserves such as Russia (27.8% of proven global reserves), the United States, Saudi Arabia, and Qatar have critical competitive advantages in the phosphate fertilizer production chain. For example, in 2023, ammonia production costs in Russia were 30% lower than in the EU, where gas prices soared following sanctions against Russia.

Major Import Markets

India is the world's largest DAP importer, accounting for 28% of total global imports. In fiscal year 2024-2025 (April 2024 - March 2025), India imported approximately 4.57 million tonnes of DAP. The largest supplier was Saudi Arabia (41.6% of total imports in FY2025), significantly exceeding the 28.3% share in FY2024. China drastically reduced shipments to India, accounting for only about 18.5% of imports in FY2025.

Bangladesh accounts for approximately 8.5% of global DAP imports. In December 2024, Bangladesh signed an agreement with Saudi Arabia (Ma'aden) to import 1.2 million tonnes of DAP over two years (600,000 tonnes in 2024 and 600,000 tonnes in 2025) at a price close to $743 per tonne. Morocco and China are also major suppliers.

The United States accounts for approximately 6.8% of global DAP imports. In 2024, the United States imported approximately 1.3 million tonnes of DAP, an increase of 3% over the previous year. Saudi Arabia is the dominant supplier with about 54% of total DAP import value, followed by Jordan (21%) and Egypt (10%).

Geopolitical Dynamics and Using DAP as a Power Tool

DAP is not only an economic commodity but also a geopolitical tool. Major producing countries have used their DAP export positions to strengthen bilateral relations and create strategic influence.

China has used DAP exports to enhance geopolitical relations with developing countries, particularly in Asia, Africa, and Latin America. Through preferential trade agreements and fertilizer aid, China has consolidated influence in strategic regions. In 2021, China donated 50,000 tonnes of DAP to Pakistan within the Belt and Road Initiative (BRI) framework. In 2023, China imposed export licenses on certain phosphate fertilizers, causing a 77% drop in exports of some critical elements.

Morocco uses phosphates as a tool of influence. For example, Morocco withdrew a shipment of 50,000 tonnes of fertilizer destined for Peru after the country resumed relations with the SADR (Sahrawi Arab Democratic Republic). The Moroccan press describes OCP as the "economic arm" of the kingdom's diplomacy.

Saudi Arabia uses DAP to strengthen relations with India through a long-term contract signed in 2022 between Ma'aden and IFFCO (Indian Farmers Fertiliser Cooperative) to supply 3.1 million tonnes of DAP per year for 5 years. In the context of Vision 2030, phosphates are tools for Saudi Arabia to build alliance networks and occupy positions in strategic regions.

Russia has used DAP as a soft power tool. In 2023, Russia donated 50,000 tonnes of fertilizer to Ethiopia as a gesture of support for food security. Russia signed agreements with India and Brazil to use rubles and reais in DAP transactions, reducing dependence on the dollar.

Challenges and Future Trends

Price Volatility and Supply Chain Disruptions

DAP prices have experienced significant volatility. In 2022, prices peaked at $815 per tonne due to supply chain disruptions, but declined to $437 per tonne in May 2025. This volatility affects producer profitability and farmers' access to fertilizers.

Sanctions against Russia since 2022 reduced the country's phosphate exports by 40%. China reduced DAP exports by 30% from 5 million tonnes in 2020 to 3.5 million tonnes in 2022 to prioritize the domestic market.

Environmental Impact and Sustainability

DAP production generates waste such as phosphogypsum, causing management and pollution challenges. Countries are investing in phosphogypsum recycling technologies and emission reduction. For example, Morocco is implementing the Green Program 2023-2027 with an investment of €1.8 billion to produce 20 million tonnes of carbon-neutral fertilizers by 2027, including DAP.

New Production Capacity Development

Countries such as Egypt, Turkey, the United States, and Qatar are investing in increased DAP production capacity. Egypt announced the Abu Tartour phosphoric acid production complex project, scheduled for completion in June 2025 with a capacity of 250,000 tonnes of phosphoric acid per year for each phase.

Norway's discovery of a 70-billion-tonne phosphate deposit could challenge Morocco's long-term dominance. Norway has sustainable energy infrastructure with 98% electricity from renewable sources, mainly hydroelectric, creating advantages for DAP production with a low carbon footprint.

Conclusion

The global DAP market is characterized by high concentration in production and exports, with five countries controlling 80% of the market. Dependence on natural gas and phosphate rock creates strategic advantages for resource-rich countries.

DAP is not only an essential fertilizer for global food security but also an important geopolitical tool. Supply chain disruptions due to geopolitical conflicts, export restrictions, and energy price volatility create significant risks for importing countries.

Future trends include investment in sustainable production, phosphorus recycling technologies, supply source diversification, and domestic production capacity development. With global demand projected to grow 3% annually through 2032, the DAP market will continue to play a critical role in world agriculture.