Insight Focus
- Egyptian urea prices rise by 14% in hours after India announces Nov/Dec tender.
- Indian fertilizer subsidies could hit USD 30.2b in 22/23.
- This is 50% higher than last year’s.
All eyes are again on India with the announcement of another major urea tender to close on the 14th of November with shipments no later than the 22nd of December. Consequently, prices on urea from the various Egyptian urea producers rose up to USD 75 PMT in just a few hours with all shipments expected to be for Europe. Prices went from a low of USD 545 FOB Egypt to USD 620 FOB. Producers in the Middle East are currently busy shipping product to India on the previous tender and appear to be comfortable with their inventory thus prices remain stable around the USD 600 FOB mark.
Although processed phosphate prices still remain weak, the announcement in India on subsidies for the various product groups of nitrogen, phosphates and potash appears to have stabilized prices for now. Current import prices in India for DAP are assessed at around 745 CFR whilst the break even cost is around USD 820 for the already planned import of 3.2 million MT. The Indian government subsidy burden for 2022/2023 is expected to reach a massive USD 30.2 billion – up 50% year on year.
Potash prices are tumbling in Brazil and SE Asia. Brazil’s granular MOP is now assessed at USD 585 CFR which is USD 5 below the current contract price in both India and China at USD 590 CFR. SE Asia standard MOP price fell another USD 25 this week to between USD 700-750 CFR. Granular MOP price dropped another USD 50 PMT to reach a range between USD 750-800. However, still these prices are holding a massive premium to Brazil’s prices thus the expectation is that prices will come down further in the days and weeks ahead.
Ammonia prices are also weak with much lower gas prices in Europe encouraging resumption of production. Latest ammonia sale to Europe reflects around USD 1,125 CFR which is substantially higher than current production cost of ammonia in Europe.
Ammonia prices are expected to fall further in the weeks ahead.
Sulphur prices are highly volatile with Muntajat (Qatar) setting November QSP at USD 149 PMT FOB, up another USD 45 or 43% from the October price and up 94% from the >August QSP of USD 77 PMT FOB. However, the spot price is still down 69% from the all-time high of USD 470-485 FOB reached in the middle of June 2022.
