Analysts predict that over the next few months, fertilizer prices will continue to behave unpredictably, with some prices going up and some going down. “The fertilizer market has remained pretty firm over the past six months… we had kind of anticipated some declines across all the different nutrients, (but) they’ve held pretty firm. So that’s made fertilizer producers relatively happy and sort of farmers less happier,” said Chris Lawson, head of fertilizer analysis at CRU Group in London, UK.
CRU forecasts that potash prices will go down this year as new supply is coming online globally, although the speed of the extra capacity hitting the market is slower than expected. At the main internal spot potash market in Brazil, prices are currently around $330 per ton, having risen approximately $50 per ton since January this year. Global deals have also had an impact on the price. China is usually first to sign its annual contract for potash in the first half of the year but has yet to sign it due significant inventories held at home. “(China has) been resisting because prices have been moving higher and they don’t want to pay much for it. So there’s been lots of toing and froing between them and the different exporters,” Mr. Lawson said.
Beijing is expected to sign the deal soon and CRU expects the capacity to go up slowly, with the demand being currently driven by emerging markets, mainly Brazil. The urea market has also been rising recently but prices at the main urea exporter market in the Middle East are currently at $270 ton, having gone up by $30 ton since January 2018. Prices are expected to go further up due to the newly imposed sanctions on Iran. “(The sanctions) affect the global trade patterns. So there will be limited availability from Iran over the next six months, so that should tighten the market up a little bit,” Mr. Lawson added.