FAO/GIEWS - Food Outlook No.4 - September 2000 p. 12

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Urea spot prices in international markets increased considerably over recent months. Prices are between 60 and 100 percent higher than a year ago. Urea production in the Russian Federation increased significantly in the first half of 2000 compared to the same period last year. Urea availability in the Baltic Sea region is restricted, various plants are down and prices are rising. India secured approximately 50 000 tonnes of urea, part of which might be used as an intermediate for the production of NPK. Following the shutdown of a few plants, the Indonesian government announced a temporary export ban for urea, but the implementation is uncertain. In China the demand for urea was lower than expected and urea production increased. China consequently is exporting urea to Viet Nam, Nepal and the Philippines. However, the present level of exports from China of about 100 000 tonnes per month is expected to decrease when the next crop season starts at the end of September. Demand in Latin American is strong. Mexico is reported to be importing 25 000 tonnes from the Russian Federation and in Brazil, imports are running 14 percent higher than the compared period of 1999. The Black Sea region is Brazil's main source of urea imports. Brazil's import duties will probably remain at 9 percent until end-2000, and then decrease to 6 percent. Urea demand in the United States is expected to increase in the coming planting season.

Ammonia prices remained stable over the past few weeks, except in the United States where they fell. Demand in Europe and Turkey has recently increased, and Morocco has reportedly tendered for 18 000 tonnes. High gas prices in the United States induced shut-downs of several plants. This trend might continue and result in larger imports. Saudi Arabia intends to improve an ammonia production plant to increase its supply capacity.

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

    2000 1999 Change from last year 1/
July August August
  ( . . . . . . . . . US$/tonne . . . . . . . . ) (percentage)
eastern Europe 124-128 135-138 68-69 + 99.3
Near East 141-146 141-146 89-91 + 59.4
Ammonium Sulphate        
eastern Europe 40-43 45-47 44-46 + 2.2
Far East 60-61 61-63 65-66 - 5.3
U.S. Gulf 45-47 45-47 n.a.-n.a.  
western Europe 55-60 55-60 60-65 - 8.0
Diammonium Phosphate        
Jordan 156-158 172-178 190-195 - 9.1
North Africa 149-155 164-171 177-186 - 7.7
U.S. Gulf 156-158 166-169 173-176 - 4.0
Triple Superphosphate        
North Africa 117-125 126-131 141-144 - 9.8
U.S. Gulf 129-136 133-139 150-154 - 10.5
Muriate of Potash        
eastern Europe 92-111 92-111 98-113 - 3.8
Vancouver 117-131 117-131 118-131 - 0.6
western Europe 115-122 115-122 129-137 - 10.9

International spot market prices for ammonium sulphate in the last few months have been stable. There were only slight changes compared to prices in the previous year. Turkey intends to import 30 000 tonnes, of which most will originate from suppliers in the CIS. The Islamic Republic of Iran is purchasing 20 000 tonnes from Uzbekistan.

Diammonium phosphate (DAP) prices increased noticeably from July to August but remain, however, between 4 and 9 percent lower than in mid-1999. In India, the government has approved a major increase in state support for domestic DAP production. Consumption for the Kharif season has decreased by 18 percent, compared to 1999, to 2.7 million tonnes. Pakistan estimates its seasonal Rabi planting requirements at 600 000 tonnes, which will be met from carryover stocks, domestic production (20 percent each) and the balance by imports. DAP demand in China is low due to drought and inventories are high. China is re-exporting DAP to neighbouring countries. Near East and North African suppliers have scheduled exports to Turkey and Argentina. Shortage of MAP in Brazil is reflected in increased demand for DAP. Russian Federation suppliers are at present fully

committed to export DAP to Argentina, Brazil and South Africa. The demand for DAP in the United States is strong and inventory levels are low.

Prices for triple superphosphate (TSP) remain 10 percent down compared to 1999, despite a slight recovery in August. Tunisia exports TSP to Pakistan and is expected to supply France and Italy.

Muriate of potash (MOP) prices have remained relatively stable over the past few months. The price in eastern European countries and North America is at approximately the same level as in the comparable period of 1999. In western Europe, however, prices are about 11 percent down from a year ago. Potash producers continue with mine shutdowns to align supply with expected demand. World potash sales in the first half of 2000 are reported to have reached 13.5 million tonnes (up 6 percent compared to 1999). CIS exports to North and Latin American, Europe and Asia in this period reached 2.8 million tonnes. Brazil imported around 1.4 million tonnes in the first half of 2000. Demand in China and Indonesia is weak. Seasonal import requirements are expected to emerge in The Philippines, Taiwan Province of China, Thailand and Viet Nam.

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