Insight Focus

  • Processed phosphate prices keep falling across the board.
  • Potash prices falling to lowest levels in two years.
  • Tampa ammonia contract for June down USD 40 PMT from previous contract.

What else is there to add than what has been said over the past few weeks other than repeating that the international fertilizer market is temporarily down and out and in a major price slump across all products.

Demand for urea is sluggish in Europe, the US which spring season is coming to an end, and Brazil which is still some time away from its 2nd half of the year urea buying main season.

Net back prices are sub USD 300 FOB AG for most markets except maybe the Australian market – but that will change also. One respite is that freight rates have halved in the past couple of weeks to destinations east of Suez which could temper FOB declines to producers.

India tender is said to be imminent – and the meaning of the word imminent should be changed to “be patient” – producers are clinging to the hope that India will tender for 1.2 million MT – product which is already in store in ports in the Baltics which is said to have 500,000 MT ready to export – plus in addition to Chinese products certainly will dominate the India market at the expense of the Arab Gulf producers. Expectation is that the L1 price could be sub USD 300 CFR.

Processed phosphate prices are also falling with China coming into the market with increased volumes now that the CIQ export process is down to less than 10 days. It is expected that China will export as much as 7 million MT of DAP and MAP in 2023 which is up 1.2 million MT from last year. Current Chinese DAP price is now sub USD 500 PMT FOB and has dropped more than USD 200 PMT since the start of 2023, the lowest level since March 2021. India DAP CFR prices are now well established sub USD 500PMT and further declines are expected.

MAP prices in Brazil took another major hit this last week with prices dropping an average of USD 30 PMT now reflecting a range of USD 490-500 PMT CFR. Massive imports and inventory buildup coupled with lower agricultural commodity prices have put pressure on prices on the back of lower farmer affordability. Further falls in process phosphate prices are expected in the next couple of months.

Potash prices are slumping across all regions. Brazil saw its lowest levels on granular potash since May 2021 with an average fall of USD 20 PMT this week to a range of between USD 350-380 PMT CFR. This represents a decline of 29% since the start of 2023 or USD 150 PMT.

SE Asia standard potash price came down an average of USD 15 PMT this week to a range of USD 380-400 PMT, the lowest level since July of 2021. However, the most interesting development this week is that the market has resigned itself to thinking that the Chinese buyers will not engage in MOP import contract discussions for 2023. China is securing all the potash they need from sources other than the majors with Belarus, Russia and Laos the major benefactors. Potash prices are expected to keep on falling in the coming months.

The Tampa ammonia contract for June has been settled between Mosaic and Yara at USD 340 CFR, down USD 40 PMT from the previous contract. TTF gas pricing in Europe has slipped below the USD 10 MMBTU barrier leaving ammonia production cost in Europe sub USD 350 plus carbon tax. Buyers have been shying away in Europe on new volumes and with depressed processed phosphate prices and urea prices there is little support for increased ammonia prices. Prices in the Far East have remained stable at the USD 300 PMT CFR level.

In summary, the annual fertilizer conference in Prague this week became a somber event with little if any positive news except for the “imminent” country of India on a possible urea tender. Other than that, fertilizer prices appear to be heading south across the board.

Stein Chingen Haugan

Stein C Haugan, boasting four decades of experience and an extensive global fertilizer network, founded Fertimetrics Pte Ltd in Singapore in June 2019. The company offers advisory, consultancy, and brokerage services aimed at helping businesses and individuals enhance their core competencies and create sustainable incremental value.

Stein’s fertilizer expertise encompasses senior management roles and board representation positions with Yara International ASA and Ma’aden Phosphate Company. He has also successfully established and managed fertilizer trading companies. Stein holds a master’s degree in business from the University of Oregon and has completed postgraduate studies at IMD.

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