Urea prices declined in December 1996 reflecting a slowdown in import demand, and the fall in prices appears to have continued in early 1997. In China, urea imports have decreased following uncertainties regarding import duties and value added tax. Demand from India is also lower. Domestic production in India was up during the third quarter of 1996 and the demand for the winter planting season could easily be met from the ample available stocks. Demand from Vietnam is lacking, as private sector dealers encounter difficulties in arranging finance for imports, and the considerable stocks carried forward are considered adequate to meet immediate needs. To avoid inventory build up, Indonesian traders exported urea to various countries in Asia and inventories are low. Exports to Thailand, China, Vietnam and the Philippines are scheduled before the end of the first quarter in 1997. Export allocations are as yet to be determined. Markets in the United States and Argentina are expected to become active after February. Current fertilizer stocks in Argentina are reportedly high. In Romania, urea production has been adversely affected by reduced natural gas supplies from Russia and factories have been operating at half capacity.
Ammonia prices recovered during the second half of 1996 to over U.S. $ 225 per ton, a level similar to one year ago. Industrial demand for ammonia, and in particular demand in the United States, has led to a strengthening of ammonia prices relative to those for urea. New capacity is becoming operational, in particular in Pakistan, India, Bangladesh and China. When construction in India is completed by the turn of the century, the country may become a less prominent ammonia/urea importer. Globally there is no trend to be distinguished in new plant size, since both large and small plants continue to be built. Ammonia prices are expected to fall further in 1997 due to ample supply and the continuation of the supply of Russian natural gas to other former USSR countries at the same price as in 1996.
| 1997 | 1996 |
Change from
last year 1/ |
||
| January | January | December | ||
| ( . . . . . . . . . . . . U.S.$/ton . . . . . . . . . . . . . ) | ( . percentage . ) | |||
| Urea | ||||
| eastern Europe | 168-170 | 193-202 | 170-172 | - 14.4 |
| Middle East | 180-183 | 211-216 | 182-185 | - 15.0 |
| Ammonium Sulphate | ||||
| eastern Europe | 72-74 | 62-64 | 73-76 | + 15.9 |
| U.S. Gulf | 72-75 | 65-73 | 72-75 | + 6.5 |
| western Europe | 75-78 | 67-71 | 75-78 | + 10.9 |
| Far East | 106-108 | 107-108 | 106-108 | - 0.5 |
| Diammonium Phosphate | ||||
| Jordan | 227-230 | 254-260 | 227-230 | - 11.1 |
| North Africa | 219-223 | 255-260 | 220-225 | - 14.2 |
| U.S. Gulf | 209-211 | 237-240 | 210-212 | - 11.9 |
| Triple Superphosphate | ||||
| North Africa | 180-185 | 168-175 | 181-185 | + 6.4 |
| U.S. Gulf | 180-185 | 168-173 | 180-185 | + 7.0 |
| Muriate of Potash | ||||
| eastern Europe | 85-95 | 78-90 | 83-95 | + 7.1 |
| Vancouver | 116-125 | 116-123 | 117-125 | + 0.8 |
| western Europe | 101-116 | 102-115 | 106-116 | - |
Diammonium phosphate (DAP) prices continued to be rather strong and relatively stable fueled by demand from China. Although prices in the DAP market were maintained with relatively few transactions, DAP prices are now showing a slight downward trend below U.S.$ 210 per ton. Demand in the United States is expected to increase in anticipation of spring planting. No major changes are likely in the DAP until India enters the market. Phosphate fertilizer consumption and production in India has been lower when compared to the previous year and fertilizer imports may be deferred to after the arrival of considerable wheat imports to avoid possible port congestion. In Europe there is very little immediate demand at the moment for DAP.
International potash prices showed a modest decline when India and Malaysia secured their requirements towards end-1996. However, demand from China continues to be strong, while Canadian suppliers encounter logistical difficulties due to poor weather conditions.