FAO/GIEWS - Food Outlook No. 3, June 1998 Page 12

FERTILIZERS

Urea prices are about 27 percent lower compared to a year ago in spite of some increase in April which mainly reflects reduced production in the CIS, higher demand, and lower stocks. Future price developments will continue to remain sensitive to changes in supply capacity from producers in the CIS. Viet Nam has entered the market, while Indonesian producers have little stock committed for export in May. Suppliers in the Baltic Sea region are reportedly selling urea for June delivery. Although availability is rising from the Black Sea region, Asian traders are reluctant to risk purchases for May loading. Black Sea producers have been selling to Latin American destinations while Middle East suppliers have already committed their export

availabilities. Urea imports by the United States were 19 percent higher in the first two months of 1998 compared to the same period in 1997 with main suppliers Canada and Qatar. Venezuela's urea and ammonia plants are back in operation and exports to other Latin American countries is expected to resume. India is awaiting the results of the Government decisions on import allocations and tender conditions; purchases of about 740 000 tonnes are foreseen for July-September.

Prices for ammonia supplies from the Black Sea, western Europe, and the United States have risen. The strengthening of US Gulf quotations is due to production problems in Trinidad and lower exports from Latin America. Although still some 50 percent lower than a year ago prices for ammonium sulphate from most origins increased in April. Albania, Malaysia, and Sri Lanka entered the market for the import of substantial amounts of ammonium sulphate

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

	1998		1997	Change from
	March	April	April	last year 1/
	( . . . . . . US$/tonne . . . . . . . )			( . percentage . )
Urea
eastern Europe	90-94	97-99	132-135	- 26.6
Near East	88-100	106-109	154-161	- 28.6
Ammonium Sulphate
eastern Europe	18-30	24-33	68-71	- 59.0
U.S. Gulf	85-90	85-90	90-95	- 5.4
western Europe	36-40	40-45	80-85	- 48.5
Far East	46-50	54-60	106-108	- 46.8
Diammonium Phosphate
Jordan	210-216	210-216	213-216	- 0.7
North Africa	208-216	208-215	204-211	+ 1.9
U.S. Gulf	195-197	201-203	194-197	+ 3.3
Triple Superphosphate
North Africa	161-164	161-165	165-170	- 2.7
U.S. Gulf	169-173	173-175	172-176	-
Muriate of Potash
eastern Europe	86-96	86-95	85-100	- 2.2
Vancouver	116-127	115-127	116-125	+ 0.4
western Europe	125-134	126-136	112-117	+ 14.4

SOURCE:

Compiled from Fertilizer Week and Fertilizer Market Bulletin.

1/ From mid-point of given ranges.

Diammonium phosphate (DAP) prices remained stable, apart from a minor increase in the US Gulf. Prices are similar to those recorded during the same period last year. India has arranged for imports from the United States, Jordan, and Mexico. Despite the uncertainty regarding subsidy on imported DAP, Indian demand for DAP is expected to remain strong in 1998, following a record DAP consumption in 1997 of over 5 million tonnes. China may enter the market earlier than usual this year due to anticipated delays in deliveries via the Panama Canal, strong domestic demand, and possible price increases. Domestic demand for the spring season in the United States continues to develop normally with prices at a discount of several dollars per tonne. Turkey is expected to import about 60 000-75 000 tonnes for shipment in June from Tunisia, Morocco is producing DAP at minimal levels and has export commitments to Argentina and Ethiopia. Jordan exports are scheduled for India and Ethiopia. Latin America has entered the market for large amounts of DAP. New Zealand intends to import 30 000 tonnes from Mexico.

Prices of triple superphosphate (TSP) from North Africa remained stable, while there was a slight increase for suppliers from US Gulf. When compared to the same period last year, prices for the North African product are about 3 percent lower. Brazil is expected to enter the TSP market in June.

Average spot prices of muriate of potash (MOP) remained unchanged in April. Compared to April 1997, however, prices are about 14 percent higher in western Europe, but slightly lower in eastern Europe. In China, in addition to the 1.3 million tonnes of imports secured earlier in the year, further imports are expected. In the United States, the price of potash imports increased in anticipation of higher domestic prices and demand. In India, where MOP consumption increased from 1.7 million tonnes in 1996/97 to 2.15 million tonnes in 1997/98 imports are being arranged for delivery in April/September. Demand for potash in Brazil, Bangladesh, Malaysia, the Philippines and Sri Lanka may support present levels of potash prices.