International DAP prices have surged 18% due to the US-Iran conflict, pushing local retail prices in Pakistan to around Rs16,000 per bag. Supply is expected to improve with imports and increased gas allocation.
DAP (di-ammonium phosphate) prices in Pakistan have soared to approximately Rs16,000 per bag following recent shipments booked by Pakistani companies at $950 per ton. This surge comes on the heels of an 18% increase in international DAP prices since the onset of the US-Iran conflict, reflecting a significant escalation in global fertilizer costs.
According to a JS Global report, near-term supply improvements are anticipated with the arrival of imported fertilizers in June 2026. This includes a cargo from Saudi Arabia and higher gas allocation to Fauji Fertiliser Company (FFC) to support local production. However, the stability of these supplies depends on timely inflows and uninterrupted gas supply.
Muhammad Waqas Ghani, author of the report, enforcement of company-fixed MRP is supporting availability for Kharif season needs; however, elevated DAP prices are likely to drive substitution to cheaper phosphate alternatives and lower application rates. This poses a risk to nutrient balance and crop yields, with market direction remaining sensitive to policy action and farmer affordability.
The report highlights FFC as relatively better positioned due to its strong local production base and more stable inventory profile. International DAP prices have surged to $840 per ton, up 18% from $710 per ton since the US-Iran conflict began. This has pushed local retail prices in Pakistan to around Rs16,000 per bag amid limited imports and cautious market sentiment.
Domestic inventories stood at 203k tons heading into May, showing a modest drawdown due to the absence of April imports and stable local production. However, demand has weakened after a strong first quarter, with April off-take declining sharply due to seasonal slowdown and affordability pressures. Industry channels suggest suppliers are releasing limited DAP volumes, while dealers may be holding inventory in anticipation of further price increases.
The Kharif sowing season is progressing, and the government has intensified enforcement of company-fixed MRP to ensure fertilizer availability and curb excessive pricing. However, trading activity has slowed since DAP crossed Rs15,000 per bag ex-Karachi, with elevated prices pressuring farmer affordability. This could encourage lower phosphate application and greater substitution toward cheaper alternatives, potentially resulting in meaningful DAP demand destruction during 2026.
Reduced nutrient application could also weaken soil nutrient balance and adversely impact crop yields over the season, increasing broader food security risks. Overall, near-term market direction is expected to remain sensitive to policy enforcement, global price trends, and farmer purchasing power.
