With a lower fertilizer production in Europe than in other years and the gas price rising again, you would say that the price for nitrogen fertilizers would not fall further. Nothing could be further from the truth, because the price for calcium ammonium nitric acid (CAS) is falling again.
Since the end of October, the price of nitrogen fertilizers has fallen rapidly. The bottom price in various European countries soon seemed to be around €70 per 100 kilos for KAS, which is the level of recent weeks. This brings it close to last summer's prices, which were at their lowest. Urea fertilizers are priced even lower and even fall below €60 per 100 kilos.
little demand
Given the high volatility of the fertilizer market, it is also difficult for wholesalers to purchase. If they buy at a high price and the price falls, they suffer a loss. However, they must also have stocks that are much smaller compared to other years so that they run less risk of stock purchased at too high a price. Currently, these stocks hardly change because the farmer is still waiting to see what the fertilizer market will do. Even now that the prices for nitrogen fertilizers are relatively low compared to the rest of the season, they remain calm and wait for the market in the hope that the price will drop even further.
With price fluctuations, the uncertainty of raw materials such as the gas price, but also the farmer who does not purchase, it is difficult to arrive at a clear price for KAS, for example. Sometimes large quantities of fertilizers have also been purchased at a higher price that have still not been resold because the farmer does not yet want to do business. On the other hand, a large load can also be purchased at a more competitive price. It is clear that the price for KAS took a step down at Farmers50All in week 4, after the price remained the same for several weeks. The price for KAS delivered in big bags is €63,80 per 100 kilos.
Urea in demand in the Netherlands
A major factor in the declining prices of CANAS is the price of urea fertilizers. These continue to fall and thus pull KAS further down because it would otherwise be priced too high. In the Netherlands, considerably more urea was purchased this year than on average in recent years. Even though very little fertilizer has been sold so far this year.
Potassium and phosphate fertilizers are also declining in Europe, but much less quickly. This is mainly due to the fact that these fertilizers are less dependent on gas as a raw material than nitrogen-containing fertilizers. The slight decrease in price is caused by low demand, which causes inventories to increase. Production is also getting underway. Production can now take place at slightly lower prices than was previously the case this year.
Ammonia exports to Russia
Also affecting the fertilizer market are the negotiations on the export of Russian ammonia. By extending the grain corridor, it was also agreed that Russia's fertilizer supplies in Europe would be given control. In total, the 260.000 tons of fertilizers that were stranded on European soil will be shipped to Russia. In addition, there are talks between the United Nations, Russia and Ukraine about reopening a pipeline system that transports ammonia from Russia to Ukraine. The UN wants Russian ammonia exports via pipeline to resume to reduce global fertilizer prices. However, Ukraine does not want exports because Russia makes considerable profits from this, at a time when sanctions are intended to paralyze the Russian economy.
Belarus also hopes to reduce its large stocks of fertilizers. The country is a global producer of potassium fertilizers and has barely been able to export its fertilizers since sanctions were imposed this spring. Last Friday, December 9, the country announced to the United Nations that Ukraine may export grain without conditions through Belarusian territory for export from Lithuanian ports. In addition, Belarus requested to be allowed to export its own fertilizers through the Baltic Sea ports.