OCP warns Hormuz disruption has evolved into global fertilizer supply shock

Morocco-based OCP Group reported first-quarter 2026 revenue of MAD 20 billion (approximately USD 2.1 billion), down slightly from MAD 21.59 billion a year earlier, as a weaker U.S. dollar and lower phosphoric acid and fertilizer volumes weighed on sales.

The company posted gross profit of MAD 11.9 billion, equivalent to a 60% gross margin, while EBITDA reached MAD 5.6 billion with a 28% margin. OCP said its structural cost advantages helped preserve profitability despite a sharp increase in sulphur prices.

A key factor supporting margins was OCP’s decision to secure sulfur inventories before the latest price spike, giving the company coverage through the end of July 2026. The producer also shifted more output toward triple superphosphate (TSP), which consumes less sulfur per nutrient tonne than diammonium phosphate (DAP) or monoammonium phosphate (MAP).

Hormuz disruption tightens fertilizer supply chain

The results came as OCP executives warned that the Strait of Hormuz crisis has moved beyond a raw-material disruption and become a broader fertilizer-supply shock. “This situation around Hormuz was in the beginning a raw material problem that has turned into a fertiliser supply shock,” Faris Derrij told the Financial Times.

According to Derrij, phosphate producers are facing a dual constraint: reduced access to sulphur imports and limited ability to export finished fertilizer cargoes. Roughly 50% of global seaborne sulphur trade and 24% of globally traded ammonia volumes normally transit through the Strait of Hormuz.

Industry analysts cited in recent market coverage said Saudi Arabian producers, including Ma’aden and SABIC, have experienced production cuts of up to 50%. Consultancy CRU Group estimates that 55–60% of Middle Eastern urea production has been halted or severely constrained since the effective closure of the Strait in late February.

OCP maintains Atlantic exports amid market tightness

OCP said its Atlantic-facing logistics network has allowed it to continue supplying international customers despite the disruption. The company shipped 90,000 tonnes of fertilizer to Latin America in late March, demonstrating that Moroccan exports remain operational even as Gulf trade routes face mounting restrictions.

However, OCP said it cannot significantly increase production to replace lost Gulf supply because of tight sulfur availability. The company expects fertilizer markets to remain supply-constrained through the rest of 2026, citing ongoing Hormuz tensions and continuing Chinese phosphate fertilizer export restrictions that have been in place since December 2025.

Market tightening is already affecting farmers worldwide. A survey referenced by the commodity analytics firm PiQ found that seven in ten American farmers cannot afford all the fertilizer they need for the 2026 growing season, while food prices have continued to rise as higher energy and fertilizer costs move through agricultural supply chains.

Sources: Morocco World News, OilPrice.com