Once again the fertilizer market breaks its records. Anyone who now wants to buy fertilizer on the daily market should take into account a price of €1.000 per tonne for CAN. Due to the high demand, the limited supply of fertilizer and fluctuating gas prices, it is uncertain at what height the new ceiling will be.
In the month of February, the fertilizer market appeared to have cooled down somewhat, but since March the upward trend has started again. KAS gradually climbed towards €800 and those who still have to order today are ticking off a price of €1.000 per tonne. This breaks a psychological barrier. There is great uncertainty with regard to the price of fertilizer. It is difficult to estimate where the ceiling of fertilizer prices lies and everyone has to get used to this price level, supplier Triferto reports. There is product available, but due to various interrelated factors, the price continues to rise. At Triferto, the situation is therefore assessed on a daily basis in view of market developments.
Luuk Hagting, product manager of Agrifirm, reports that a further price increase is not impossible: "Potentially, there can certainly be an additional 50%, but nobody knows where the ceiling lies." Because the supply is now more limited and the demand for fertilizer is high, the price could rise further, according to Hagting. "On the other hand, who is going to pay for this now and can it be paid at all?"
Production capacity and limitations
It has been known for some time that production capacity had already been significantly reduced, but that is now becoming apparent because there is limited availability of certain fertilizers and products. Alternatives are being sought, causing the price in those segments to rise again. Add the fluctuating gas price and other restrictions on raw materials such as urea and you arrive at the current price levels. It also became clear last week that the Eurochem fertilizer factory in Antwerp will be shut down. The German chemical giant BASF no longer supplies raw materials to Eurochem, because the company is in Russian hands. Russian oligarch Aldrej Melnichenko, owner of EuroChem, tried to keep production going by resigning as director.
Fertilizer stock
According to Hagting, the availability of fertilizer is not a problem in the Netherlands. "The estimate is that we have enough for almost the entire season. Only what the price level will be in the future is uncertain." The surrounding countries also have sufficient fertilizer before the start, but how this will develop later in the season is uncertain. Sources indicate that there is a shortage at various traders. These days, more fertilizer is ordered from Agrifirm than they can supply logistically. Stock is available, but delivery simply couldn't be faster. In recent months, Agrifirm has warned that the delivery times of fertilizers could be jeopardized. This is now the case due to the postponement of purchase from the farmer, all the hectic around production and early spring. Compared to the year 2020-2021, Agrifirm is approximately 30% behind in fertilizer delivery at the end of February.