In July and August there was relatively little going on in the fertilizer markets, but what will that be like in the near future? Will there finally be a jump up?
There was relatively little action on the fertilizer markets in July and August, but that suddenly changed in September and October. The fertilizer market experienced a significant price increase; it is now behind us.
Lower prices
The international fertilizer trade kicked off the season in July with lower prices. For example, urea prices, which are seen as an indicator for the overall market, were so low that there was little confidence in lime ammon prices. Joris Broekhuis of Triferto sees that the trade is taking a wait-and-see attitude. "When buyers no longer expected it, prices suddenly started to rise. Traders have to add money to cover their position and that causes a chain reaction."
Although demand is not forthcoming, the market is still rising sharply on the idea that supply is tighter than previously estimated. "This is particularly the case in the Chinese market, where the industry is confronted with increasing environmental regulations. Coal-fired factories are being limited in their production or closed completely because they no longer meet emissions requirements. This causes supply to shrink, leading to some panic among traders."
Confidence is back
At the beginning of November, everyone seems to have regained confidence in the market. "It looks like prices will rise further towards the spring, but we will no longer see those significant jumps," says Broekhuis. Urea rose €80 per tonne. Because the dollar has become weaker, this substance is even more expensive in dollars. "I expect this level to be maintained in the coming months. Calcium ammonium prices will follow the higher urea prices on the world market." Triferto currently uses a KAS recommended price of €22,75 per 100 kilos, delivered to the farmer.
Other fertilizers that add up are ammonia and all nitrogens. "European phosphate prices have increased slightly in recent weeks, but given the small demand in the EU, this product is always relatively competitively priced. The demand for NPKs is increasing, while the potash market is relatively stable. There is a lot of supply and large volumes have already been sold, which is why I think prices will not drop anymore, but will rather be stable to slightly increasing until spring."