Opinions Focus

  • European fertilizer producers are cutting back capacity.
  • This is because of high energy costs.
  • In contrast to urea, phosphate prices are falling.

In response to the closure of European fertilizer production capacity, urea prices have surged over the past few days with Egyptian granular urea price reaching USD 900 FOB which represents an increase of around USD 90 PMT. The Middle East spot price is pegged at around USD 750, up close to USD 100 PMT. Malaysian producer Petronas announced a spot sale of between USD 710-720 PMT FOB which is USD 155 above last week’s reported price.

Urea prices are expected to continue to increase on the back of India’s 1 million MT tender to close on the 9th of September, increasing demand in Brazil, US, and Europe.

Contrasting the increases in urea prices world wide, processed phosphate prices are tumbling with DAP leading the pack. OCP of Morocco is said to have sold in excess of 550,000 MT of DAP to India this week for shipment in September and October at prices USD 50-70 PMT FOB less than previous sales. Current prices are estimated at around USD 820-830 PMT FOB. MAP prices in Brazil fell another USD 15 PMT this week and are now around USD 780-820 CFR.

Potash prices are following the trend of process phosphates with lack of demand in Brazil forcing producers to look elsewhere for sales. Granular MOP prices in Brazil now reported at between USD 780-800 CFR, down another USD 15 from last week and as much as USD 390 PMT or 33% less than the USD 1,300 high in April this year.

Adding to this, tenders in Indonesia and Bangladesh for standard MOP indicate that Russian as well as the sanctioned Belarus product were represented putting more pressure on prices.

Ammonia markets in the Far East are dormant and yet China is reported to be offering ammonia at USD 700 PMT FOB, or USD 850 CFR South Korea, limited tank capacity prevents buyers from taking advantage of favorable prices. The Tampa settlement price for September is up USD 50 PMT to USD 1,150 but still way short of the peak of USD 1,625 in April.

Stein Chingen Haugan

Stein C Haugan, boasting four decades of experience and an extensive global fertilizer network, founded Fertimetrics Pte Ltd in Singapore in June 2019. The company offers advisory, consultancy, and brokerage services aimed at helping businesses and individuals enhance their core competencies and create sustainable incremental value.

Stein’s fertilizer expertise encompasses senior management roles and board representation positions with Yara International ASA and Ma’aden Phosphate Company. He has also successfully established and managed fertilizer trading companies. Stein holds a master’s degree in business from the University of Oregon and has completed postgraduate studies at IMD.

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