This Is The ASX Fertiliser Stock Positioned At The Right Place At the Right Time!

It is a good time to be in an ASX Fertiliser Stock, if ever there was one. The global fertiliser industry is facing its most severe supply crisis in a generation, and the companies best positioned outside the danger zones could emerge as the biggest winners. Two seismic events have collided to reshape the market: the ongoing U.S.-Israeli war on Iran and China’s sweeping ban on fertiliser exports. While the Iran conflict has dominated headlines, it is China’s move that may prove the more consequential and lasting disruption. And sitting quietly in Tunisia, with a world-class phosphate project and a string of imminent catalysts, is ASX-listed PhosCo (ASX:PHO).

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The Iran Conflict: A Chokepoint Under Fire

When U.S. and Israeli forces launched strikes on Iran on 28 February 2026, the knock-on effects for global agriculture were almost immediate. The Strait of Hormuz was effectively blockaded and traffic has since fallen by more than 70%, with maritime insurance costs in the region becoming prohibitive.

The consequences for fertiliser markets have been severe. Urea, the world’s most widely traded nitrogen fertiliser, surged from around $400–490 per metric ton before the conflict to approximately $700 per metric ton within weeks, representing a ~50% jump. Ammonia prices rose about 20%, and phosphate-linked products including sulphur, of which nearly half the world’s exports transit the Strait, have also spiked sharply.

The timing could hardly be worse. Northern Hemisphere farmers are deep into their spring planting season, when fertiliser demand is at its peak. Vessels from the Persian Gulf to the U.S. Gulf Coast typically take 30 days, meaning supply disruptions now will directly hit the March–April application window. Countries like India, Brazil, and several African nations, which import heavily from Gulf producers, face acute shortages. Ethiopia, which sources over 90% of its nitrogen fertiliser from the Gulf, may simply not have enough to plant.

China’s Ban: The Bigger and More Structural Threat

Yet for all the drama of the Iran conflict, China’s fertiliser export ban may be the more significant and enduring shock to global supply. In mid-March, China implemented what industry observers are calling a comprehensive “zero-export” policy on key fertilisers, including nitrogen-potassium blends and mainstream phosphate products such as monoammonium phosphate (MAP) and diammonium phosphate (DAP). Combined with pre-existing quotas on urea, between half and three-quarters of China’s fertiliser exports are now restricted, potentially up to 40 million metric tonnes, according to Reuters analysis.

The scale of this matters enormously. China is the world’s largest fertiliser producer, accounting for roughly 30% of global phosphate production and exporting more than USD$13bn worth of fertilisers last year. Countries including Brazil, Indonesia, Thailand, Malaysia, and New Zealand depend on China for a fifth to a third of their fertiliser imports. The world was looking to China to fill the gap left by the Gulf, and China has instead closed the door.

Crucially, this is not simply a response to the Iran war. China has a history of restricting fertiliser exports to prioritise domestic food security, and industry sources at a Shanghai fertiliser conference told Reuters that the bans are unlikely to be lifted before August at the earliest, with many analysts expecting extensions well beyond that. BMI senior commodities analyst Matthew Biggin was blunt: “This pattern is consistent, China restricts supplies rather than coming to the rescue during global tightness.”

The Iran conflict may eventually resolve, but China’s domestic policy imperatives will not.
Together, these two forces have created what analysts at The Conversation have called a “fertiliser shock”. A shock because it is a simultaneous collapse in both Gulf and Chinese supply that is testing the resilience of the global food production system in a way not seen since the post-pandemic commodity crisis of 2021–22.

PhosCo: An ASX Fertiliser Stock With Right Project at the Right Moment

Against this backdrop, investors should be paying close attention to PhosCo (ASX:PHO) and its flagship Gasaat Phosphate Project in Tunisia. Gasaat already hosts a JORC-compliant resource of 146Mt at 20.6% P₂O₅, sufficient to sustain a mine for nearly five decades. As if this was not enough, this resource has been established from just two of the project’s nine prospects. The remaining seven are largely unexplored.

Pitt Street Research, which covers PhosCo, valued the Gasaat project at A$839m in its base case and A$975m in its bull case, against a current market capitalisation of barely A$30m. On a per-share basis, Pitt Street’s valuation sits at $0.35 per share in its base case and $0.56 in the bull case. The December 2022 Scoping Study underpinning these numbers used a phosphate price of just US$150 per tonne. With phosphate prices now materially higher amid the current supply emergency, the economic case for Gasaat has strengthened considerably.

There’s No Shortage Of Imminent Catalysts That Could Re-Rate the Stock

What makes PhosCo particularly compelling right now is the cluster of near-term catalysts converging in 2026. The company is expecting a maiden Mineral Resource Estimate (MRE) from both its KM and SAB prospects at Gasaat. KM and SAB are two additional deposit areas beyond the two already in the resource estimate.

Early drill results from KM have been encouraging, with grades consistently above 25% P₂O₅ and the best intercept returning 49.8 metres at 22.4%. A positive maiden MRE from these two prospects would meaningfully expand the project’s already substantial resource base and de-risk the path to production.

Following these resource updates, PhosCo is targeting a revised Scoping Study in the first half of 2026, incorporating the new resource data. This is a direct precursor to a Bankable Feasibility Study (BFS), itself expected later in 2026 – a milestone that would open the door to formal project financing. The European Bank for Reconstruction and Development (EBRD) has already formalised its support with a mandate to co-finance technical work, lending significant institutional credibility to the project.

Tunisia’s location is another understated advantage. Outside the Middle East and entirely independent of Chinese supply chains, Gasaat sits within a Western-friendly jurisdiction with government support, community backing, and direct rail access to the Port of Rades. In a world scrambling for secure, politically stable fertiliser supply, that matters enormously.

Conclusion

The fertiliser crisis of 2026 is exposing the fragility of global supply chains with unusual clarity. For PhosCo, that fragility is an opportunity. With a world-class resource, a Western-friendly jurisdiction, EBRD backing, and a suite of resource and feasibility milestones imminent, the company is advancing its project at precisely the moment the world needs new phosphate supply most.

PhosCo is a research client of Pitt Street Research. Pitt Street directors own shares.