FAO/GIEWS - Food Outlook No.1 - February 2000 p. 11

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Urea prices continued to increase in the first month of 2000, reflecting generally tight supplies and strong demand. Export prices from the Black Sea region in eastern Europe steadily increased in January reaching a 15-month high, some 25 percent above those a year earlier. Production is at full capacity in this region, while Caribbean and Indonesian producers have temporarily cut back production. Strong demand is expected in the coming weeks in southern Europe and Turkey in anticipation of spring planting while, at the present price level, the demand in Latin America is also expected to increase, particularly in Argentina. Urea availability remains low in Europe and in the United States, where prices have increased particularly. In the Asian region, reduced supply capacity in Indonesia, and strong demand in the south Asian market resulted in higher urea prices. Fertilizer imports in Viet Nam have been liberalized; the government expects an import requirement of almost 2 million tonnes in 2000. Near East producers are committed to supply India 60 000 tonnes of urea; exports are scheduled to meet demand in Viet Nam, Sri Lanka, Bangladesh and the Philippines.

Ammonia prices have risen around the world since mid December 1999, reflecting a short-lived curtailment in shipments from the Black Sea region while demand, in particular from India, increased. Increased demand is also expected from south Asia. Ammonia prices from Black Sea producers are expected to be affected in the near future by a likely gas price review. Ammonia availability in the United States is generally adequate to meet DAP producers' demand.

International spot market prices of ammonium sulphate were some 30 percent higher in the European market in January compared to the same period in 1999. In the Far East, the increase was less pronounced at around 10 percent. In the United States Gulf, however, prices declined by about 14 percent. Export availability from the Baltic Sea area will be affected in the coming weeks by diversion of supply to the domestic market.

Average Fertilizer Spot Prices (bulk, f.o.b.)

  2000 1999 Change from last year 1/
  January January December  
  ( . . . . . . . US$/tonne .. . . . . . ) (percentage)
eastern Europe 79-81 63-65 69-69 + 25.0
Near East 109-113 79-82 95-97 + 37.9
Ammonium Sulphate        
eastern Europe 42-43 31-34 40-42 + 30.8
Far East 55-56 50-51 55-56 + 9.9
U.S. Gulf 42-44 45-55 38-41 - 14.0
western Europe 55-60 41-46 55-60 + 32.2
Diammonium Phosphate        
Jordan 164-169 205-209 165-170 - 19.6
North Africa 159-164 201-207 162-166 - 20.8
U.S. Gulf 147-151 201-203 145-148 - 26.2
Triple Superphosphate        
North Africa 131-135 158-162 132-135 - 16.9
U.S. Gulf 136-140 163-170 136-140 - 17.1
Muriate of Potash        
eastern Europe 95-109 95-108 95-109 +  0.5
Vancouver 117-131 115-129 117-131 + 1.6
western Europe 129-137 129-137 129-137 -

Diammonium phosphate (DAP) prices showed a decline in early 2000 compared to a year earlier. Demand for United States' DAP slowed down from China and Pakistan towards the end of 1999, but exports to India, Australia and Mexico considerably increased. Significant price changes in the United States are not expected until domestic demand for spring planting increases. Demand from Europe and South America is low. Pakistan secured supplies from Morocco and the Russian Federation. Russian Federation producers are expected to supply some 40 percent of output to the domestic market. China's entry to 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. Production cut backs have somewhat stabilized the global DAP market and prices are foreseen to remain at similar level in the short term.

Prices for triple superphosphate (TSP) in January were 17 percent less than a year earlier but remained stable during the month. Demand has been generally weak in the past few weeks.

Latest prices for muriate of potash (MOP) are little changed compared to the same period in 1999 in Europe and Canada. Canadian producers contained their output to match demand. Total production in 1999 was almost 10 percent lower when compared to output in 1998. Near-East producers increased output as favourable weather conditions in 1999 increased demand from farmers. Demand is expected to increase in Europe and the United States in the coming weeks for the spring season. Demand will pick-up in Latin America a few months later.

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