US President Donald Trump's decision to pull out of the Iran nuclear deal will affect the fertilizer trade. Iran is an important fertilizer producer.
Because the United States (US) is withdrawing from the nuclear deal with Iran, economic sanctions against the country will be reinstated. These sanctions could reduce the supply of nitrogen from the country. This is because Iran is an important nitrogen producer and exporter; the country exported more than 2017 million tons of nitrogen in 4.
Traders report that they will not take any risks and that they will wait to purchase nitrogen until things are clear. However, other sources say that Iran has always found ways to sell its nitrogen well. It is not yet clear what the impact of canceling the deal will be on global nitrogen prices.
Bad moment
The problem arises at a time when there is a lot of demand for nitrogen from the Middle East. This is partly due to the fact that the largest nitrogen supplier (China) is out of the market, because the costs of coal in the country are rising sharply. This is despite the fact that it is the most important source of energy for the nitrogen power stations in the country. The price for nitrogen on global markets has been above last year's level for some time now.
This means that there is less demand for fertilizer and that has an undermining effect on prices. Fertilizer producer Yara announced that in this spring significantly less fertilizer has been deposited. The reason for this could be it cold be spring.
Prices decline
Fertilizer prices in the Netherlands are under pressure, as various traders notice. It means that prices are already decreasing compared to last year. The price for KAS is just under €20 per 100 kilos, free of charge. That's quite a bit lower compared to it beginning of this year, when around €24 per 100 kilos was paid free of charge. The price for Kali is higher, around €30 per 100 kilos, free of charge.