Published on : 10/06/2022 – 01:51
The fertilizer market breathes. Prices stopped their wild ride in May, even though they are still very high.
Whether for nitrogen fertilizers produced from natural gas – ammonia and urea – or potassium fertilizers, all inputs have been on hold for a month.
The fear of running out at the start of the war in Ukraine which caused prices to jump is behind. “We thought that there would be no more Russian products on the market“, says a trader, “when in the end the flow did not stop“. Although DAP (diammonium phosphate), MAP (monoammonium phosphate) or Russian potash hardly ever enter Europe, these inputs still supply the Indian and Brazilian market.
Lower seasonal consumption
This stagnation, or even this decline in prices, may also be influenced by a supply that promises to be more abundant: the main North American producer Nutrien has announced its intention to increase its potash production by an additional million tonnes of by the end of the year – i.e. 20% more than in 2020, the objective being to produce 40% more by 2025, i.e. 18 million tonnes.
Chinese supply is also slowly returning to the market, since the easing of export restrictions a few weeks ago, and given China’s weight on the fertilizer market, the signal is not negligible.
The easing of prices also comes from a lower demand according to an expert: the seasonal logic explains the drop in consumption which will resume in September-October in the northern hemisphere. Ammonia prices are otherwise such that they lead to a drop in demand.
Prices that will remain high due to uncertainties
Prices nevertheless remain high: they have tripled over the past eighteen months, even before the start of the Russian offensive. And should still remain at high levels according to FranceAgriMer, the monitoring unit of the French Ministry of Agriculture, given the uncertainties that persist over supply, and the conflict in Ukraine which still weighs on gas prices.
