There is little spectacle in terms of trading on the European fertilizer market. That is not surprising given the period in which we are now. As previously expected, Kali does show a price drop. At a global level, a shift is visible with regard to nitrogen fertilizers.
Every year it is quiet in the summer months with the fertilizer trade and this year is no different. Prices have been moving quite steadily for several weeks. On average, nitrogen fertilizer such as KAS has fallen slightly in price in recent weeks, but prices have now risen slightly at some suppliers. Nitrogen fertilizer is currently traded between €27 and €34 per 100 kilos, depending on region and how it is delivered.
Farmers4All's weekly fertilizer prices show a sharp decline this week (week 29) for potash and triple superphosphate. There, potash fell from €69,80 to €50,80 per 100 kilos. In recent weeks, potash fertilizer prices have already fallen sharply from various suppliers. The decline had been coming for some time because demand was lagging behind due to high prices in Europe. Potassium prices had risen sharply after the Russian invasion of Ukraine. Belarus and Russia were the main suppliers of potash to Europe. Now that had to come from elsewhere. In other parts of the world, potash prices had been under pressure for a long time, so it was only a matter of time before prices in Europe would fall.
Nitrogen fertilizer prices are rising outside Europe
While nitrogen fertilizer in Europe mainly declined on average and has now remained stable, a clear shift can be seen on the world market. The prices of nitrogen fertilizers are now rising again for the first time in a long time. In recent months, the market has only experienced price declines or remained stable. The demand for the well-known urea, for example, continues to increase. Urea prices rose in America, the Middle East and Brazil. This picture is not yet clearly visible in Europe, although an increase was visible for the first time in France. This is not surprising given that very limited fertilizer is purchased during these summer months around the harvest.
Where, when and how fertilizer prices in Europe will move remains uncertain. The fact remains that sales prices have fallen sharply over the past year and have reached their current level due to a large oversupply. Some of the fertilizer was sold at a price below production costs. If there had not been a large oversupply of fertilizer last season, the current price level for nitrogen fertilizer would probably be somewhat higher. After all, producers did not want to and could not be left with their stocks. The fact that nitrogen fertilizers are increasing on average worldwide does send a signal that something is about to happen, but the situation in Europe is different from other parts of the world.
Although production costs - which are mainly influenced by the natural gas price - are now much lower than last year, the price remains quite volatile and higher than two years ago at more than €27 per MWh. European fertilizer producers will in any case take into account the cautious purchasing behavior of the European farmer for the coming season and will not produce an oversupply of fertilizer again. Recently (and also now) this uncertain factor has been partly resolved with the import of ammonia to Europe. The supply of ammonia in the world had increased significantly, causing prices to fall. That made it interesting for Europe to import.