Urea prices fell over the past two months. In eastern Europe, December
prices were quoted at about 30 percent below those a year earlier, while in
the Near East, prices were about 21 percent down. This downward trend is expected
to continue, as demand for urea is normally limited at this time of the year.
Currency devaluation during the last quarter of 1998 allowed CIS producers to
divert output to the international market, where they are reportedly receiving
prices of around US$60 per tonne, which might lower the floor price in the world
market. The timing and volume of the demand in Latin America will effect prices
and production in the Black Sea and the Baltics. Production in Mexico is temporarily
halted and stocks in Venezuela are low. Indonesia may become a net importer.
India is scheduled to import 200 000 tonnes for the first quarter of 1999 and
further imports of 2.2 million tonnes are envisaged. Pakistan imported small
quantities of urea; other import allocations for 1999 will depend on domestic
production. Turkey has entered the market and expects the arrival of 50 000
tonnes by end-January. In the United States, domestic market prices may show
a slight increase prior to the temporary closure of the river transportation
system, where after prices are expected to fall again quickly.
Prices for ammonium sulphate remained relatively stable during late
1998. December prices in western Europe and the U.S. Gulf were 10 percent and
35 percent respectively less than a year ago, while prices in the Far East and
eastern Europe were 10 percent and 24 percent respectively more than a year
Ammonium prices have been declining in recent months and this
trend is expected to continue in the near future because of generally low demand
and ample supply. This is especially the case for the Black Sea producers where
stocks are reportedly high (60 000 tonnes). Producers in the Near East have
reduced ammonium prices to meet competition from Asian suppliers. Ammonium prices
may increase when Indonesia starts to increase urea production again. DAP production
in the United States decreased and therefore also the demand for ammonia.
Phosphate fertilizer prices on the international spot market
declined somewhat, with latest quotations around 0.2 percent lower compared
to last year. The DAP export market in the U.S. Gulf has apparently stabilized
as China entered the market for about 2.5 million tonnes. India retroactively
established subsidies for phosphate and potash fertilisers irrespective of origin.
Import demand may now come earlier rather than at the beginning of the summer
planting season. The availability of ample stocks in the CIS continues to put
downward pressure on export prices. Ethiopia is expected to import DAP from
North Africa. Europe will continue to be supplied from the Baltic Sea, while
Romanias entry into the market will add to the supply potential from the
International prices of potash have increased marginally compared to
the previous year in Canada and western Europe, and by 11 percent in eastern
Europe. Demand in the Asian market is increasing, in particular from Sri Lanka,
Nepal and Viet Nam. Viet Nam increased its import allocation by 70 000 tonnes.
Potash stocks in China are low and China has agreed to a price increase for
its imports from Canada. Potash production capacity in China, however, is expected
to increase in the next few years. Indonesia is scheduled to import 120 000
tonnes from China and Canada. Demand for potash in Brazil remained quiet due
to foreign exchange uncertainties. In the United States potash fertilizer demand
is low due to low grain and oilseed prices with the prospect of a possible reduction
in the area planted. In Europe, however, demand increased following improved
weather conditions for planting.
|November||December||December||last year 1/|
|( . . . . . . . US$/tonne . . . . . )||( . percentage . )|
|eastern Europe||69-71||64-66||88-97||- 29.7|
|Near East||87-98||81-84||100-109||- 21.1|
|eastern Europe||26-36||31-35||22-31||+ 23.1|
|U.S. Gulf||45-55||45-55||75-80||- 35.5|
|western Europe||40-45||40-45||45-50||- 10.5|
|Far East||50-51||50-51||42-50||+ 9.8|
|North Africa||209-217||205-213||203-216||- 0.2|
|U.S. Gulf||203-206||200-203||199-202||+ 0.5|
|North Africa||160-164||158-162||161-166||- 2.2|
|U.S. Gulf||163-171||163-170||170-173||- 2.9|
|Muriate of Potash|
|eastern Europe||95-107||95-108||85-95||+ 12.8|
SOURCE: Compiled from Fertilizer Week and Fertilizer Market Bulletin.
1/ From mid-point of given ranges.