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Fertilizer prices have undermined the morale of many farmers for more than a year. But a glimmer of hope is emerging. The prices of certain inputs have fallen, the others remaining closely linked to geopolitical vagaries.
Despite the war in Ukraine, the flows from the region have not dried up. “ There will be fertilizer for all “, assures a trader. There is in fact no formal ban on the transit of Russian fertilizer. The main obstacle to the circulation of Russian fertilizers is the reluctance of insurers who are reluctant to cover cargo leaving Russian ports. But for six months, substantial volumes have continued to leave the country: the two main producers, Phosagro and Eurochem, manage to supply their subsidiaries in Europe, Brazil or the United States, assures our interlocutor.
OCP increases its African offer
Maintaining supply is affecting potash prices, which are benefiting from an increase in production in Canada. DAP prices also fell. This fertilizer, which was worth 1,000 dollars a ton a few months ago in India, has gone down to 680 dollars. That’s a 30% drop.
The downside, still on the other hand, is the price of nitrogen fertilizers, urea and nitrate, which are not falling because they are closely linked to gas prices. Prices so difficult to bear that several large European factories had to slow down or stop the manufacture of these fertilizers. Some 70% of European production of ammonia – which is used in the composition of urea – has been stopped since August, according to the association Fertilizer Europe.
Africa’s way out could be on the continent. And in Morocco in particular: the Office Cherifien des Phosphates (OCP) announced at the beginning of the week that it wanted to make four million tonnes available to the continent next year. This would allow the Moroccan giant to double its sales to Africa in 2023 compared to 2021.
The necessary volumes should therefore be available. But at what price, of course, is the question.
Rumor of a “ban” on the export of Chinese fertilizers
The courses will depend on the logistics, from Russia, but also on what will happen in China. There are rumors of a total fertilizer export ban which could be introduced next January. If the information is confirmed, the decision could have an impact on the market. China notably supplies the Indian market with urea and phosphate fertilizer.
► To read also: Soaring fertilizer prices: concern of major agricultural countries