Anyone who pays attention to fertilizer prices will see that little has changed in the past period. Things are about to change on the global market. The price of urea has risen and it is not the first time that calcium ammonium nitrate has followed that trend.
The price of urea, which largely determines the price of calcium ammonium nitrate (KAS), rose sharply at the beginning of September. The reason for this was that China, a very large producer of the fertilizer that supplies many countries in the world, indicated that it would limit the export of urea. In doing so, China is trying to increase supply on the domestic market and protect its fertilizer market, where the price for nitrogen fertilizer has risen considerably in recent times due to limited supply. The restriction will reduce supply on the global market, meaning buyers such as India may have to purchase urea elsewhere. However, it is uncertain how exactly the export restriction will work and whether it will be a definitive restriction. Various analysts indicate that there is currently no restriction.
One thing to note is that there is currently no global demand for urea. Analysts expect that demand will not suddenly pick up in the coming months.
Trend visible
A slight price increase has been visible since the beginning of the summer after urea was very competitively priced on the world market this spring (below $300 per tonne). The current price in September on the world market is around $400 per tonne of urea in both the Middle East and the US. The trend is fairly comparable to the price of KAS in Europe and shows that urea partly determines the price development of KAS. KAS was the cheapest at the end of this spring at around €30 per 100 kilos. Now that is €35,80 per 100 kilos, according to the weekly fertilizer prices from Farmers4All. Compared to the summer, this is already a price increase of almost 20%.
In addition, supply and demand, and of course the still volatile gas price in Europe, also play a major role in the price of nitrogen fertilizer. Demand is very limited at the moment. That's not surprising for the time of year. The price of imported ammonia, on which some of the European fertilizer factories now run, also plays a role in the price that the farmer ultimately pays. But given the trend of urea, it is not surprising if KAS will soon be closer to €400 per tonne again.