Since a long time again an increase in the fertilizer market

For several weeks now, nitrogen fertilizer price drops have been minimal or have remained stable, but for the first time in a long time, the price of nitrogen fertilizer is now rising again. Farmers4All quotes €32,80 per 100 kilos for calcium ammonium nitrate (KAS) this week. The price increase of €1 per 100 kilos is minimal, but does indicate that the market appears to be entering a different phase.

This first, small price increase does not mean that nitrogen fertilizer prices will increase significantly again. There are few reasons for this at the moment. As in previous months, demand remains low and farmers have only purchased what they think they need. Trade and industry also record less volume due to fluctuations in price levels and therefore have smaller inventories. Because fewer stocks are recorded and shorter periods are worked, the effect is that price fluctuations persist. The smaller stocks all have a different price and in some periods the trade runs out of stocks more quickly than at other times. One batch of fertilizer may have slightly lower costs in a stable market than another. That is also one of the reasons why the price takes a small step down in a short time, and just as easily goes back up again. In addition, the price also varies per supplier.

For the time being, the floor price for nitrogen fertilizer appears to remain around €30 per 100 kilos, given market developments. This could change again, but there seem to be few reasons for this at the moment. The period is currently approaching when less fertilizer is purchased and a lot is produced by producers. In previous years it has almost always been shown that this makes fertilizer cheaper towards the summer.

Another development that the fertilizer industry is keeping an eye on is the European natural gas price. Natural gas serves as a raw material for ammonia, after which nitrogen fertilizer can be produced and is also needed during its production. A lot of ammonia is currently imported from outside Europe because it is cheaper than producing it yourself. In addition, there is an oversupply of ammonia on the world market, which puts further pressure on its price. Global ammonia prices have already fallen sharply, which means that this market price has also been relatively stable in recent weeks. But the latest developments in the European gas price may change the import of ammonia. The price of natural gas has fallen considerably, to below €30 per MWh, which means that producing ammonia yourself can become interesting again for fertilizer producers. This could also be an impetus to produce cheaper nitrogen fertilizer again

Potassium and phosphate-containing fertilizers remain expensive in Europe. Farmers4All has kept these prices unchanged for several weeks. Kali60 stands at €74,80 per 100 kilos. €81,80 per 100 kilos is paid for Triple superphosphate. In Europe, potash prices remain stable to date. This is different on the global market. Potassium prices continue to fall globally due to oversupply and low demand. Agreements have been made in China and India on lower potash prices. That also weighs on the potash market. These developments have not yet reached Europe, but analysts expect that the price of potash will also fall on this continent in the coming months.