Fertilizer prices continue to fall and are under pressure from supply and falling gas prices. At least, when it comes to the price of nitrogen fertilizers, other fertilizers remain price-holding so far. In other continents, however, prices are falling sharply and it seems only a matter of time. Europe is a major importer of potash and phosphate fertilizers.
The price for nitrogen-containing fertilizers also fell again around Christmas. The urea commonly used in Europe is now approaching €500 per tonne and the lime ammonium nitrate (CAS) is following the same trend. The cause for this is known: a relatively large supply produced at relatively high costs, and weak demand for the fertilizer from farmers worldwide. Not that a lot of fertilizer is normally purchased during this period, but that the farmer has been cautious since the summer is clearly reflected in the sales. While fertilizer production in Europe last summer was at least 60% lower than normal.
Gas price leading again
Another fact is that the gas price had again fallen considerably before Christmas. The price dropped from €142 per MWh to €84 per MWh. At the time of writing (Tuesday, December 27), the TTF is trading at 82 per MWh. For producers, this means that production costs for nitrogen-containing fertilizers have again been cut, provided that the gas price continues to maintain this price level. The even lower production costs will further increase the pressure on fertilizers. With the current gas price, we are at the same price level as before the war between Ukraine and Russia broke out.
KAS towards €50
Prices are falling drastically worldwide. In the Netherlands, this decline took a little longer, especially compared to France and Germany. The first KAS trucks are now being sold for €60 per 100 kilos. In week 4, Farmers51All even recorded €59,80 per 100 kilos of KAS, delivered in big bags. The current prices, which are lower than last summer, are arousing interest among various farmers, insiders report. They reserve part of the required fertilizer and spread the risk, given the fluctuating fertilizer prices this season.
Potassium and phosphate fertilizers have hardly declined so far. Potassium fertilizers are declining in several European countries, but are declining very steadily. However, farmers certainly do not seem to want to do business at these prices. The supply, which is slowly increasing, should put pressure on prices, but because the production of potash fertilizers requires much less gas compared to nitrogen fertilizers, they have hardly fallen so far.
Other countries are taking over
Europe obtains potash and phosphate fertilizers from countries other than Russia and Belarus. Recently published export figures from the Egyptian Export Council show this. The council quoted a report from the European Commission last week that fertilizer exports to Europe were 187,5% higher than the previous year, almost twice as much. In monetary value that was €2 billion. Other countries, such as Morocco, also saw their potash exports to Europe double.