After the historic rally in March after the invasion of Ukraine, nitrogen fertilizer prices have fallen since early April due to the resumption of production in Europe and waning international demand. But it appears that Russia is withdrawing from the export market and India is buying back, which could change the situation.
Global urea prices rose in March due to Russian export restrictions and slow production in Europe. (© AdobeStock) to meAfter strong growth throughout March, Fertilizer prices are dropping In recent weeks, in France and internationally.
The global urea prices Significant increase in March “because of Russian export restrictionsthat affected the show, and Natural gas price hikeWhich reduced production in Europe,” explained Marc Zribi, head of FranceAgriMer’s grain and sugar unit, in mid-April.
the same for ammonia cycle. For DAP (Ammonium Phosphate), “prices hit new highs in March due to a combination of factors,” expert identifies: Strong Demand from India and South American countries The ban on the export of phosphate from China, in addition to the problems of supplying from the Black Sea.
Mark Zribi particularly highlighted the strong demand for fertilizers from Brazil. As of April 6, its annual imports totaled 10.43 million tons, a 27% increase compared to the same period last year.
‘Sharp bearish correction’ in April
The tone changed in April, marked from the second week of a “clear downward correction” in Fertilizer marketIn the words of our analyst Marius Garrig. Partially related to Resumption of European production of ammonium nitrate“driven in particular by the gradual decline in gas prices” and “the release of strong pressure on prices processed at the factory gate”.
Another explanation for this drop in prices: The global demand for nitrogen fertilizers has decreased. Indeed, South American countries are entering their usual seasonal trough and in the United States unfavorable weather is delaying orders and supplemental purchases.
Above all, many operators are waiting to switch to purchases that have been put on hold for several weeks from the next day India Tender For shipments expected in mid-May. “The market does not know if India will turn to Russia to cover its needs, which would cause a rapid dilution of the fertilizer market,” said Marius Garrig.
He also notes that high urea prices have discouraged buyers: “Exporters were only able to process Too little business These past weeks.” So much so that Egypt and Algeria, in particular, decided to reduce customs duties.
Urea price for a year. (© Terre-net Media)
Indian tender raises many questions
Finally, the much-anticipated Indian bid was dropped on April 28 and runs until May 11. he arrived ” Too late to stop falling back Prices, according to analysts from the CRU Group, raise many questions: “Will Russia have the right to participate? Is China relaxing? export restrictions ? Will global producers seize the opportunity to liquidate their positions before the calm period? Josh Linville, fertilizer specialist for StoneX, tweets.
my world # orea Prices continued to stagnate from record levels, the slippage caused by the absence of demand from India, the world’s largest importer. The long-awaited bid, the first from India since February 7, finally appeared on April 28 but not soon enough to stop the decline pic.twitter.com/1NCkb97qZ3
Fertilizer Week (@ FertilizerWeek1) April 29, 2022
On the Russian side, Fertilizer export quotas It could be extended until mid-2023, and not until the end of May 2022. The goal is to maintain availability and accessible prices in the domestic market, according to Russian officials.
For Mike Nash, an analyst at Argus Media, the “export offer is significantly lower than in previous years,” a “sign of the Russia withdraws from international markets “.enough to raise prices in the coming weeks?
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