European fertilizer prices are on the rise. The dynamics on the world market are the biggest culprit. Fertilizer prices are under pressure, partly due to expensive raw material prices, high energy prices and good demand. Analysts and traders believe that this trend will continue in the coming period.
Fertilizer analysts and traders agree: nitrogen prices will continue to rise for the time being. One of the reasons is the dynamics on the international urea market. The high natural gas prices also make it difficult to produce cheap fertilizer. The high gas prices also remain a major concern for the fertilizer industry in the Netherlands, explains Kai Kikkers, CEO of Triferto. "However, Dutch fertilizer factories have the advantage of being able to take in ammonia, which makes them less dependent on fluctuations in gas prices when the ammonia price is favorable than manufacturers in countries such as Germany and Poland."
Factories in these countries that are completely dependent on gas as a raw material have indicated that they will have to close down if the gas price continues to be high. The German SKW Piesteritz is a good example of this. Halfway through this month, one of the largest producers of fertilizers in Germany announced that it would reduce its production and close two ammonia factories.
World market influences Dutch prices
The world market also has an influence on prices in the Netherlands, Kikkers shows. "China is still not exporting, which keeps the price of urea relatively stable. India, a large buyer of urea, continues to keep demand high. If China does not export and India continues to overcharge, urea prices will probably not fall." India has issued a new tender, after a previous failed attempt to purchase sufficient urea. The volume of the previous tender was less than 200.000 tonnes. This is exceptionally low, because India may want to buy up to 1,5 million tonnes.
Kai Frogs
In addition, buyers in North America and Europe are trying to replenish their inventories, while large Asian buyers are also doing so at the moment. The competition for a relatively limited supply is therefore high. At the same time, Europe is struggling with lower production of nitrogen fertilizers. A number of factories have stopped or reduced their production due to the high costs of energy.
In Western Europe, prices remain stable, at the high level of last week, reports German Agrarheute. The spot market price for urea in German import ports is €525 per tonne, which is €75 higher than at the end of December. For calcium ammonium nitrate (CAN), prices have risen sharply in recent weeks. They are at €370 per tonne, an increase of €23 since the end of December. UAN has also become more expensive and currently costs €311 per tonne. €12 more than last month.
What does the farmer notice?
In the Netherlands, fertilizers such as KAS are expected to increase even further in the coming weeks. The price per tonne is almost €80 higher on the purchasing side than in December. Because the market has limited stock at a lower price level, says Kikkers. Prices in the Netherlands will increase in the coming period, says Kikkers. The question is when exactly farmers want to buy fertilizer. "If they need it now (for March, April), then the chance that the price will drop is small".
Across the border, we see that other fertilizers show a similar trend, Agrarheute outlines. Korn-Kali now costs €325 per tonne, an increase of €15 since the end of December. If we look at diammonium phosphate (DAP), the most important phosphate fertilizer for German farmers, the price level is currently €672 per tonne. €19 more than at the end of December.
What can farmers expect in the coming months? According to Kikkers, the price of urea will remain stable and high in the coming period, but the question is how the situation will develop. "The geopolitical situation plays a major role. We expect prices to be high until the end of March. If the gas price remains relatively high, it will be unrealistic to expect the nitrogen price to drop."