Little Demand Anywhere for Fertilizer

Opinions Focus

  • Global potash and phosphate prices continue to fall.
  • Brazilian MAP is 44% lower than its April peak.
  • The big question: at what price will demand emerge?

The international fertilizer market is in a lull with little demand anywhere resulting in continued falls in potash and processed phosphate prices globally. Brazilian MAP prices dropped another USD 40 PMT this week and are now 44% or an average or USD 575 PMT lower than the peak in April of USD 1,300 PMT CFR.

DAP prices in India are also coming down this week with another USD 30 PMT now trading between USD 720-750 CFR.

Urea prices did not respond after the RCF India tender and the outlook for prices is bearish for the near future. Middle East producers are comfortable with their positions and the expectation is that India will come back into the market with another 1 million MT tender some time in October.

The question of potash prices is how low they have to go before demand will pick up. There is limited demand in SE Asia as well as Brazil where prices dropped another USD 15 PMT this week.

Albeit some demand for ammonia in Europe, lack of demand in Asia encourages volumes to be moved west towards Europe and Turkey.

The only real interesting note this week is the fertilizer situation in China.

China’s January-August 2022 granular phosphates exports declined 54% year on year to 5.12 Mt from 11.14 Mt (down over 6 Mt) as the country restricted overseas fertilizer shipments, latest S&P Global data show. Strict export controls came into force on fertilizers from China starting 15 October 2021 although a number of cargoes were given export clearance in recent months after a 40-60- day inspection period, particularly DAP from state-owned enterprises in China. Exports of DAP from China in August were 518,453 t, down 5.7% year on year while January-August DAP exports reached 2.15 Mt t, down 55% year on year. DAP exports in the eight-month period included 739,366 t to India, down 38%, 236,878 t to Thailand, down 56%, 312,259 t to Bangladesh, down 21%, and 160,880 t to Japan, down 45%. DAP exports to Pakistan slumped 82% year on year to 122,471 t. China’s August MAP exports slumped 72% year on year to 156,505 t from 564,424 t in the same month of 2021, leaving the volume for January-August down 62% year on year at 1.19 Mt. MAP exports in the eight months to Brazil declined 67% to 520,875 t, volumes to Argentina crashed 50% lower to 206,670 t and exports to Australia dropped 56% to 149,013 t. Combined DAP/MAP exports in the first eight months of 2022 reached 3.35 Mt t, down 58% year on year (a drop of over 4.5 Mt from 7.89 Mt in January-August 2021).

Exports of NPK from China in January-August slumped 40% to 354,713 t, including a 57% drop in exports to Myanmar (65,319 t) and a 43% decline in exports to the Philippines (62,772 t). Imports of NPKs by China from January through August were 590,977 t, down 33% from the same period in 2021. Exports of NP/NPS from China in the eight months fell 35% to 623,803 t. TSP exports from China in January-August 2022 dropped 59% year on year to 463,424 t with volumes to Brazil down 605 to 195,362 t. Exports of SSP from China in the first six months declined 37% to 328,383 t. China’s phosphate rock exports in January-August rose 51% year on year to 367,251 t, with 267,936 t going to South Korea, 44,165 t to New Zealand, 28,713 t to Malaysia and 26,438 t to Japan.

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