Goldman Sachs has been forced to revise its forecasts sharply upward — the intensity of the ongoing fertilizer crisis has far outstripped Wall Street’s initial expectations.
As the blockade of the Strait of Hormuz enters its seventh week, the turmoil in the global fertilizer market is defying even Goldman Sachs’ own projections. On April 14, a team led by Duffy Fischer, an analyst with Goldman Sachs’ U.S. Agriculture Equity Research, published a new report acknowledging its earlier cautious stance and revising earnings estimates for the fertilizer sector higher across the board. The core conclusion is straightforward: Nitrogen fertilizers are the hardest-hit chemical supply chain in the conflict, with global urea prices surging 50% to 70% since the crisis began, varying by region. Fischer himself noted the shock has “exceeded our initial expectations,” reflecting not just price volatility but the release of a structural supply crisis.
For investors, Goldman Sachs has identified two clear winners: U.S.-based nitrogen fertilizer producers CF Industries (CF) and Nutrien (NTR). With domestic natural gas prices in the U.S. remaining relatively stable, the two companies’ production cost advantages have never been more pronounced.
Yet the crisis is not without losers. Skyrocketing sulfur prices are hammering phosphate fertilizer producers — Mosaic (MOS) announced on April 8 that it would idle two phosphate mines in Brazil, expecting a pre-tax non-cash charge of $350 million to $400 million in the first quarter of 2026. Goldman Sachs put it bluntly: The duration of the conflict is the most critical — and uncertain — variable driving all valuation adjustments.
Nitrogen Fertilizers: The Most Impacted Chemical Supply Chain Globally
Goldman Sachs researchers note that the Middle East, home to the world’s cheapest natural gas, has built a massive nitrogen fertilizer production base. The region has virtually no domestic agricultural demand, so nearly all output is exported. This structural feature makes nitrogen fertilizers the most vulnerable segment in the current crisis.
Specifically, urea produced in Iran, Qatar, and Saudi Arabia accounts for roughly 35% of global trade, all of which must transit the Strait of Hormuz.
Additionally, Egyptian urea exports make up about 5% of global trade. While these volumes do not pass through the strait, they rely on natural gas supplies from Israel. Egypt has stated it has sufficient gas to maintain industrial production through the summer, so this volume is not currently at risk. For ammonia trade, 15% to 20% of globally traded ammonia also moves through the Strait of Hormuz.
With more than seven weeks elapsed since the conflict began, shipping flows through the strait have ground to a halt. Combined with long transit times from the Middle East to end markets, the risk of physical shortages continues to build. Fischer emphasized in the report that even if the strait reopens, full price normalization could take months — making the timing of a resolution critical to CF and NTR’s full-year earnings.
Phosphate & Sulfur: A Cost Spiral Takes Hold
Phosphates are the second-most affected fertilizer category.
On international benchmarks, diammonium phosphate (DAP) prices in Brazil and India have risen about 25%, while U.S. domestic DAP prices are up roughly 20%. U.S. farmers had already been holding back on purchases amid high phosphate prices, and persistent cost pressures have dampened demand-side momentum — though tight supply remains unrelieved.
Sulfur, a key input for phosphate fertilizers, faces its own crisis: 40% to 45% of globally traded sulfur passes through the Strait of Hormuz. Combined with pre-existing tightness from Russian export restrictions and growing non-fertilizer industrial demand, sulfur prices have already hit all-time highs.
Goldman Sachs notes that as second-quarter sulfur contract prices are set, U.S. domestic DAP prices will need to rise further to pass through higher input costs.
Phosphate producer Mosaic (MOS) announced the idling of two Brazilian phosphate mines on April 8 and plans to sell its Araxa assets, expecting a pre-tax impact of $350 million to $400 million in 1Q26. As a result, Goldman Sachs cut its FY2026 EBITDA forecast for MOS by 9% to $19.50 billion, while maintaining a “Buy” rating and trimming its 12-month price target to $31 from $32.
Potash: Calm for Now, But Watch for Demand Diversion
Compared to the volatility in nitrogen and phosphate markets, potash has remained relatively stable.
Middle Eastern potash production (primarily from Israel and Jordan) is exported via the Red Sea, with no disruptions reported to date. North American potash supplies also remain ample.
Goldman Sachs sees no immediate reason to revise potash price forecasts. However, researchers flagged a potential demand-side risk: Sky-high nitrogen and phosphate prices could force farmers to prioritize limited budgets for nitrogen fertilizers, weighing on potash purchases — especially given already strong potash applications last year, and potash’s traditionally third-place ranking in farmer spending priorities.
Goldman Sachs stresses that the duration of the conflict remains the single most important variable. As long as the Strait of Hormuz remains blocked, fertilizer prices and earnings expectations for related companies will face persistent upward pressure.
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