FAO/GIEWS - Food Outlook March/April 1997

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FERTILIZERS


International spot market prices for urea continued in their downward trend and are foreseen to fall still further. The outlook for the urea market remains weak. India entered the market in early February to benefit from falling prices. China is reducing its imports as production from new plants comes on line. Prices have been weakening now that it is clear that value added tax will not be applied to fertilizers. In Indonesia prices have remained stable due to a tight supply situation. Its exports to the Philippines, Myanmar and Vietnam continued with shipments scheduled to arrive before end March 1997. A new plant is expected to be commissioned. In the Russian Federation, a consortium of several fertilizer manufacturing plants emerged to jointly arrange procurement of raw materials, energy and logistics and to negotiate exports. The consortium also intends to develop the domestic market. In the United States, demand for granular urea is low with suppliers waiting for a price increase. Honduras and Guatemala are expected to import substantial quantities.

As ammonia is the raw material for urea and ammonium sulphate production, its prices may serve as an indicator for future price changes of nitrogen fertilizers. Ammonia prices fell in recent months and are expected to decrease further. The Ukraine has ample availabilities and the demand is low. There is also ready availability in Algeria which is expected to be exported in small cargoes to the Mediterranean and North Africa. In the United States, domestic prices remained relatively stable. Production is below normal due to plant problems.Capacity will increase, however, as new plants are being built and old ones are being improved. In Trinidad, Brazil and Venezuela production constraints are being encountered; however, exports are expected to increase in the coming years. The import demand from India is foreseen to increase, although in some states imports will decrease due to the commissioning of new plants currently under construction.

Ammonium sulphate prices remained almost unchanged except for the U.S. product for which an increase is reported. Ammonium sulphate is primarily used in some countries in Latin America and in Asia.

Diammonium phosphate (DAP) prices declined slightly in February. Weather conditions in the United States have adversely affected demand for DAP; however, as spring planting starts the situation is expected to improve. Despite a reduction of DAP production, domestic prices in the United States are expected to fall as a result of lower export prices and sales. India is currently the only active market for US exports. Large imports are foreseen in the near future as the adhoc subsidy is likely to increase for both imported and domestically produced DAP, in an effort to induce better balanced fertilizer use. Exports from Jordan are being made from existing stocks to the Philippines, Malaysia, Thailand and Australia.

Triple superphosphate (TSP) prices have changed little and were quoted in February at around U.S.$ 175 - 180 per ton; this is about the same level as one year ago. Morocco and Tunisia are offering TSP at prices slightly above U.S.$ 170 per ton to stimulate interest in Europe. The demand for TSP in Latin America and the Islamic Republic of Iran is weak.

International potash prices remained stable for all markets except for a slight increase in western Europe. Prices have moderately increased compared to 1996. Demand in China continues its strong upward trend and most of the potash tonnage arriving comes from the CIS, and this year also from Israel. In India, the demand for potash is expected to increase with shipments expected by April-June. Brazil is as yet to enter the potash market this year.

AVERAGE FERTILIZER SPOT PRICES (bulk, f.o.b.)


1997 1996 Change from
last year 1/

January February February

( . . . . . . . U.S.$/ton .. . . . . ) ( . percentage . )
Urea



eastern Europe 168-170 154-160 191-196 - 18.9
Middle East 180-183 169-173 205-210 - 17.6
Ammonium Sulphate



eastern Europe 72-74 72-75 66-69 + 8.9
U.S. Gulf 72-75 90-95 65-72 + 35.0
western Europe 75-78 74-79 69-75 + 6.3
Far East 106-108 102-105 107-108 - 3.7
Diammonium Phosphate



Jordan 227-230 220-226 253-260 - 13.1
North Africa 219-223 210-215 255-260 - 17.5
U.S. Gulf 209-211 200-203 237-240 - 15.5
Triple Superphosphate



North Africa 180-185 173-177 174-179 - 0.8
U.S. Gulf 180-185 178-181 174-179 + 1.7
Muriate of Potash



eastern Europe 85-95 83-95 78-90 + 6.0
Vancouver 116-125 117-125 117-125 -
western Europe 101-116 109-116 102-115 + 3.7

SOURCE: Compiled from Fertilizer Week and Fertilizer Market Bulletin.
1/ From mid-point of given ranges.


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