Insight Focus
- IFA sees 2022 fertiliser demand dropping
- Chinese, Russian European exports seen falling in 2022
- Rise in exports from other countries not enough to offset this
Current high fertiliser prices may be capped or come under pressure from the demand destruction they are causing
The International Fertilizer Association (IFA) expects demand to shrink across all major segments in 2022.
The IFA is forecasting that global nitrogen-based fertiliser consumption will drop 0.5%, or around 585,000 tonnes to 112.915 million nutrients tonnes. The drop in urea equivalent is around 1.3 million mt from around 119 million mt.
Phosphate fertiliser nutrient consumption is expected to drop around 5%, or 2.4 million tonnes of nutrients, to 47.6 million tonnes. This drop is equivalent to around 5.2 million tonnes of diammonium phosphate (DAP) product.
Potash fertiliser consumption is expected to drop as much as 10.4%, or 4.2 million tonnes to 37.3 million tonnes. This drop is equivalent to 7.1 million tonnes of muriate of potash (MOP) or potassium chloride to 63 million tonnes.
Prices Surging
Since the start of 2020 fertilizer prices have increased as much as fourfold for phosphates and as much as two to three times for nitrogen and potash products. The reasons for these increases have been reduced supply due to COVID-19, China restricting exports due to food security concerns, strong demand because of increased grain prices, sanctions against Belarus on MOP as well as indirect sanctions against Russian fertilizers, European gas price hikes and freight cost increases caused by higher bunker-fuel prices.
Exports Expected to Shrink
Global urea exports (urea accounts for around 50% of all fertilizers consumed globally) are expected to be around 48.8 million tonnes product in 2022, down from 50.1 million in 2021. Russian exports will be 1.2 million tonnes, less than their total exports of around 7 million mt product in 2021. China’s 2.2 million mt exports in 2022 will be down from the 2021 exports of 5 million tonnes.
This will be partly offset by Increased exports from new production in Nigeria (700k tonnes and Brunei (400k), the US (600k – up from around 400k in 2021) and other countries (800k), according to data from CRU.
CRU also said that Belarus’ potash production in 2022 is expected to drop to 4.7 million tonnes from 12.9 million in 2021 and Russia’s to 9.7 million tonnes from 14.9 million. Belarus is under sanctions on MOP, Russia is suffering from indirect sanctions on payments, banks, chartering of vessels and consumer avoidance of Russian products, so-called self-sanctioning.
