FAO/GIEWS - Food Outlook, April 1998

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After the sharp decline in 1997, urea prices have stabilized in early 1998 but remain on average about 50 percent below those a year ago. Prices of urea from the Baltic origins have in fact increased slightly over the past weeks reflecting tight supplies from this origin. Prices from the Black Sea origins may stabilize or rise slightly in coming weeks, also due to an expected tightening of supplies following production cutbacks. Demand for urea in Latin America is expected to increase at the present price level, particularly in Argentina, where rains have come at the right time. China is not expected to enter the international market for significant imports before the second half of 1998, despite relatively high domestic prices. By contrast, India is expected to import about 350 000 tonnes in 1998, despite having increased its domestic production capacity by about 2 million tonnes per year.

Ammonia prices from most origins have risen since mid-February, in response to a short-lived curtailment in shipments from the Black Sea origins which coincided with increased demand. Inventories of Arab Gulf producers are low and apparent shortages are expected to persist.

International prices of ammonium sulphate continued their downward trend in early 1998. In the eastern European market spot prices of ammonium sulphate are now some 70 percent below those of the same period in 1997. For western Europe and the Far East, the decline was less pronounced at around 50 percent. In the US Gulf, however, prices remained almost at the same level, sustained by an increase in demand of about 25 percent.


1998 1997 Change from

January February February last year 1/

( . . . . . . . US$/tonne . . . . . . ) ( percentage )

eastern Europe 81-90 78-89 154-160 - 46.9
Near East 91-102 82-94 169-173 - 48.7
Ammonium Sulphate

eastern Europe 48-27 13-29 72-75 - 71.3
U.S. Gulf 42-50 42-47 102-105 - 57.0
western Europe 83-88 85-90 90-95 - 5.4
Far East 43-48 33-36 74-79 - 54.3
Diammonium Phosphate

Jordan 208-214 221-217 220-226 - 4.0
North Africa 206-216 210-216 210-215 + 0.2
U.S. Gulf 193-196 191-193 200-203 - 4.6
Triple Superphosphate

North Africa 162-165 162-165 173-177 - 6.6
U.S. Gulf 170-174 170-174 178-181 - 4.2
Muriate of Potash

eastern Europe 85-95 86-94 83-95 + 1.2
Vancouver 115-127 114-126 117-125 - 0.5
western Europe 126-136 128-138 109-116 + 18.3

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

Export prices for diammonium phosphate (DAP) rose in February and are now close to those prevailing a year ago. They are expected to remain generally firm in the short term, reflecting reduced supplies due to production cut backs. However, some of the cut backs are only temporary for plant maintenance. Indications that India would enter the market kept prices at a steady level in the US Gulf; however, Indian importers are awaiting a clarification on the governments policies on DAP subsidies. Nepal and Pakistan are also expected to import in April/May. Morocco has increased its production to meet strong demand from China, Ethiopia, and Europe. In the United States production has also increased to meet the increased domestic market demand usual at this time of the year. Supplies from the CIS are very low.

Prices for triple superphosphate (TSP) are about 5 percent below those of last year and have remained stable during early 1998. Demand has been weak in the first months of 1998.

In early 1998, muriate of potash (MOP) prices were 18 percent higher in western Europe compared to a year earlier but steady in eastern Europe and Canada. Potash prices are expected to remain stable in the short-term. The CIS increased its exports to Asia, the United States, and Latin America and expanded production by approximately 25 percent. Although the depreciation of some currencies in Asia is affecting demand, supply is still limited and prices are expected to continue to rise. China has secured 1.3 million tonnes of imports while the purchases by India depend on the continuation of domestic subsidies. Demand is expected to increase in the near future in Europe and the United States for the spring season plantings while the bulk of demand in Latin America will be later this year.

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