Violin Gorcinschi
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Fertilizer prices continue to fall on the world market. At the same time, traders report an increasing supply and reduced interest in buying from farmers.
Urea is now sold 100 euros less than at the beginning of the month, and ammonium nitrate is below 400 euros/ton. It is thus expected that farmers will benefit from better prices for fertilizers needed in the spring agricultural campaign.
Fertilizer prices in rapid decline
Fertilizer prices continue their rapid downward trend in the European and international market, which is characterized by a global supply surplus, say analysts quoted by Agrarheute.com.
Purchases in Europe and North America remain very limited, despite the approach of the spring campaign. Apparently, a large part of the quantities have been contracted until the end of 2022, and the downward trend in prices does not lead farmers to make further purchases during this period.
Analysts in the fertilizer market also stated that the offers for the next campaign show significant reductions, given the high stocks and the continued decline in gas prices. According to traders, the sharp declines in the price of urea seen in Egypt, for example, in recent weeks were not enough to trigger a buying trend.
In German ports, urea costs less than 510 euros per tonne since last week and almost 100 euros less than at the beginning of the month. The current price is more than 200 euros lower than at the beginning of the year. More precisely, the current price of urea is the lowest since September 2021 – in the last 18 months.
Ammonium nitrate, the most important nitrogen fertilizer used by German farmers, currently costs just under €400 per tonne, compared to €560/tonne at the beginning of February and €615 per tonne at the start of the year history. This shows that prices for German farmers have returned to the level of October 2021.
Falling gas prices influence the price of nitrogen fertilizers
And in the US, fertilizer prices continue to fall. The Tampa anhydrous ammonia spot contract was at $590 a tonne, the lowest since July 2021, down 25% in the past two weeks, according to fertilizer analysts at Bloomberg Green Market.
Ammonia in Tampa has fallen nearly 40% since January amid lower gas prices.
Such a sharp drop in wholesale prices usually indicates that retail prices will also shrink significantly, even if there is a gap. According to Bloomberg analyst Alexis Maxwell, prices could fall further if large reserves of European natural gas, a key ingredient in making most nitrogen fertilizers, prompt more producers to restart operations after shutting down last year .
The much-anticipated urea tender for India was published this week and ends on March 3, with deliveries till June 1. The market reacted very cautiously for various reasons, on the one hand because of the long delivery time and on the other hand because India wants to buy significantly less than expected.
