Fertilizer market report: prices strong as demand remains high

Urea

Urea prices in most markets have made a slow recovery this week after last week’s economic turmoil which saw many buyers step out of the market.  Market sentiment is still mixed, the current strength may have fragile foundations as buyers in Europe and Latin America are still hesitant and waiting for prices to correct downward again when new capacities come online in late Q3 and Q4.

However, prices may easily be sustained if the demand projections are correct and, with the current loading and logistical problems in China, this could mean that their potential exports fall short as India, Bangladesh and buyers in the Americas return to the market to secure tonnage for September/October arrival.

Interest is slowly returning to markets and grain prices remain buoyant - but caution is very apparent as buyers and traders are not prepared to take risks and extend their risk-taking in a very difficult market.

Ammonium Nitrate

In Europe, CAN and Ammonium Nitrate prices are only being maintained and tonnages have been traded for October at similar prices to September. In the UK, the market is very quiet and GrowHow have been rumoured to have traded small volumes for October at £345 delivered, which benchmarks imported product at £335 October.

Phosphate

Another nervous week of outside market impact has brought more deferral worldwide, which may result in lost time for Phosphate buyers.  The Chinese 'low export’ tax deadline on DAP/MAP ends on 30th September.  After this deadline, the export duty on DAP/MAP then reverts to 110% which will effectively remove China from the export market at a time when Ethiopia and India are buying heavily. The outlook on Phosphate prices remains stable to firm.

Sulphur

Sulphur will be required as, potentially, the winter oilseed rape area is forecast to increase and, internationally, Sulphur products are in demand as farmers globally continue to recognise the benefits of sulphur applications.