Fertilizer prices in Europe are slowly falling due to weaker demand. Falling gas prices are also having a major impact. However, this has not yet led to major declines and it is uncertain what the price level will be.
Global demand for fertilizers has decreased recently due to high prices. In various places around the world, farmers can no longer afford the sky-high prices for fertilizers. Farmers also do not want to purchase fertilizers at this price. After all, the price is so high, who is even going to pay for it? This causes global demand for the raw materials of fertilizers and fertilizers to weaken and leads to lower prices. For example, the price of urea worldwide has already fallen slightly, but phosphate and potash prices are also following this trend.
What could also have a major influence on the price in the coming period is the new agreement between Ukraine, Russia, Turkey and the United Nations on the grain corridor. Russia would like to make the export of fertilizers and raw materials such as ammonia possible to Europe again and is using this as one of the pawns for an extension of the grain corridor. If this succeeds, it will have a downward effect on the prices of the various fertilizers and their production. However, producers can also refuse the use of Russian raw materials.
Slight price drop visible
It is known that the gas price has a major influence on the price of fertilizers. Now that gas prices have fallen sharply, European fertilizer production could increase sharply again. This has been slow in recent months and some producers have stopped complete production. European producers purchased raw materials elsewhere in the world to continue production. This had a price-raising effect on the global market for raw materials to make fertilizer.
A clear price drop is visible in several countries in Europe, such as in the French import port of Rouen. The price for the fertilizer urea was €920 per tonne at the beginning of September and fell to €810 in mid-October. On October 28, this price itself fell to €760 per tonne.
Limestone nitrate in Germany also fell from over €880 per tonne in September to €844 per tonne this month, a decline of around 5%. Other nitrogen fertilizers are also declining by up to 10% in Germany. Potassium and phosphate fertilizers also take a step down. In the Netherlands, Farmers4All still records the same prices as in recent weeks and no decrease is visible.
European factories back up and running
Several fertilizer manufacturers have now indicated that they will resume production. For example, the German chemical group BASF has restarted ammonia production due to the lower gas price. They also purchased ammonia elsewhere in recent months to continue producing it on a piecemeal basis. This was reported by the economic daily De Tijd.
Another fertilizer giant that has resumed production is Poland's Azoty Group. They indicated in a press release last week that the prices of various fertilizers were declining and were below €850 per tonne when the factories had to close a few months ago. In the press release they even recommend that you definitely stock up on some of it in the near future given the uncertainty that exists, in view of the situation in Ukraine. Production costs could rise again at least as quickly and winter has yet to come, the company reports. It is not known what the prices of fertilizers are at the moment.
Raw materials from Morocco
One of the companies that has benefited from rising prices and the scarcity of fertilizers is the Moroccan phosphate giant OCP. The country is one of the largest fertilizer exporters in the world after Russia, China and Canada. In fact, it is the second largest exporter of phosphate fertilizers after China. OCP managed to significantly increase production and thus increase the global supply. According to the OCP reports, exports have increased by 77% compared to the same period last year. The producer's turnover has even doubled. Due to the larger presence this year, this can have a positive effect on trade with Europe and other continents in the field of fertilizers and raw materials in the longer term. Historically, Europe was mainly supplied by Russia and these relationships may change in the future.