Urea spot prices in international markets continue to be substantially lower than one year ago. The absence of demand from China and a much lower import demand from India has only partly been offset by a substantial reduction of supplies in the Russian Federation where production is estimated at approximately half of the installed capacity. Facilities located close to ports, however, continue to operate at full capacity. The impact of recent Asian floods on urea import demand is yet unknown. Urea stocks in China declined in June, and are estimated at the equivalent of two months urea production. Local prices have been increasing. In India, a review of stock availability, production capacity, and demand has resulted in reduction of the estimated import requirement for 1998 by almost half. In Indonesia, increased domestic demand will be met from supplies earlier envisaged for export. Viet Nam is reported to be considering import restrictions. Domestic stock availability and the recent devaluation make substantial immediate imports unlikely. Urea demand in the United States is expected to remain low until the autumn planting season. Urea prices are expected to change little in the short term.
Ammonia prices in Asia and in the United States continued to decline while they have stabilized in Europe due to temporary reduction in supply from the Ukraine. In Mexico and Turkey, production capacity has been temporarily reduced. India is expected to augment ammonia imports from various sources in addition to the supplies already secured from Bangladesh.
International spot market prices of ammonium sulphate are considerably below the level observed in 1997. The decline in prices in Europe is higher than in the United States and the Far East. The trend of decline in price continues though at a somewhat slower pace when compared to early 1998.
Diammonium phosphate (DAP) prices increased in August and almost reached the early 1997 price level. DAP production in the United States is operating at full capacity to meet the considerable export commitments to China. Lower stocks and committed production from manufacturers in the Near East and North Africa suggest tight supply in the immediate future. In China DAP demand is almost entirely met through
contracts and little spot market activity is expected before this years end. Pakistan has recently entered the market; limited domestic supply availability suggests that demand for imports will continue beyond October Near East and North African suppliers have scheduled exports to India, the Philippines and Italy while exports to China may continue. In India, the establishment of a strategic stock of 200 000 tonnes DAP is envisaged. Russian and Mexican suppliers are at present fully committed to supply the domestic markets and exports. The slightly upward trend in international spot prices is somewhat offset by lower shipping rates. DAP prices are foreseen to remain stable in the short term.
Prices for triple superphosphate (TSP) have shown little change in recent months. Pakistan intends to import a large volume of TSP to supplement its DAP imports. TSP prices in Brazil declined due to ample supply, high stocks, and lower demand due to lower soybean prices. Demand from Syria and the Islamic Republic of Iran is expected to be met through imports from Tunisia.
Muriate of potash (MOP) prices in Europe are higher than one year ago, while in North America spot prices are at the same level. Imports iby China in the first half of 1998 were about the same as in the corresponding period in 1997 with major suppliers being the Russian Federation and Canada. India has secured major supply arrangements well into 1999. In the United States potash prices are expected to increase before planting this autumn. In Brazil, domestic prices have been increasing slightly. Bangladesh and Indonesia are expected to enter the market to meet seasonal import requirements. MOP prices are expected to show a slight increase.
|July||August||August||last year 1/|
|( . . . . . . . US$/tonne . . . . . . . )||( percentage )|
|eastern Europe||84-87||85-87||105-107||- 18.9|
|Near East||97-111||99-111||127-135||- 19.8|
|eastern Europe||30-38||26-36||48-51||- 37.4|
|U.S. Gulf||59-63||45-55||85-90||- 42.9|
|western Europe||40-45||40-45||80-82||- 47.5|
|Far East||68-73||68-73||95-97||- 26.6|
|North Africa||210-216||209-215||204-213||+ 1.7|
|U.S. Gulf||208-210||209-211||193-194||+ 8.5|
|North Africa||162-165||159-164||161-165||- 0.9|
|U.S. Gulf||175-176||168-172||161-164||+ 4.6|
|Muriate of Potash|
|eastern Europe||89-101||90-105||85-100||+ 10.2|
|western Europe||125-136||126-136||112-117||+ 14.4|
SOURCE: Compiled from Fertilizer Week and Fertilizer Market Bulletin.
1/ From mid-point of given ranges.