FAO/GIEWS - Food Outlook No.1 - February 2001 p. 12

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International Urea spot prices continued to increase from December 2000 onwards. Urea production in the United States was 50 percent of normal output due to high natural gas prices. The demand in the United States market drove prices up, and suppliers in Indonesia and China benefited from tight supply in the Arab Gulf. However, in the last week of January the gas price fell and production is estimated to have reached 75 percent of normal output in February. Compared to the same period a year ago urea prices have increased by 50 to 60 percent. Apart from the developments in the United States market, production capacity in Egypt is curtailed as the result of plant shut down, which made supply even tighter. Export prices from the Black Sea region are unstable, and were expected to move up again in anticipation of increased European imports when the spring planting season approaches. Output in the Black Sea rose from 25 to 50 percent of production capacity, while Indonesian producers schedule to shut down 2 plants for a month. Indonesian producers are allowed to export provided that the domestic market is supplied. Due to import demand from the United States, global supply is tight, and strong demand in the south Asian market resulted in higher urea prices. Indonesia is supplying Viet Nam (requirement 150 000 tonnes), the Philippines and Taiwan. Turkey has entered the market for considerable quantities. Production capacity in Argentina became operational after some initial problems. The demand in Latin America is increasing, but purchases are postponed in anticipation of price reduction, while Peru delays purchases in expectation of the government decision on import duties on urea. In Sri Lanka the subsidy on urea was increased to RS 9 842 per tonne. Near East producers are committed to supply the United States; exports are scheduled to meet demand in Australia, Iran, the Philippines, Sudan and Thailand.

Ammonia prices doubled since January 2000, again reflecting temporary closure of plants in the United States. Prices continue to increase, especially in the Near East. Producers in the Black Sea area intend to sell 300 000 tonnes and cut back on urea production to increase ammonia surplus production.

International spot market prices of ammonium sulphate were some 30 percent higher in the eastern European, Far East and US Gulf markets in January compared to the same period in 2000. In western Europe, the increase was less pronounced at around 9 percent.

Diammonium phosphate (DAP) prices showed a slight increase in the beginning of 2001 compared to a year earlier. Due to increased ammonia input prices, DAP prices are unlikely to decrease as producers in the United States and CIS reduced their production. Production cut backs have somewhat increased the global DAP prices. Demand for United States' DAP is low, small amounts are exported to Australia, China, Colombia, Ecuador and Africa. Due to high nitrogen prices domestic United States DAP demand could rise, when farmers increase the soybean acreage at the expense of maize. The CIS is supplying Uruguay and Viet Nam. Demand from Europe and Latin America is low in the presence of substantial stocks. Pakistan secured considerable supplies from Morocco, CIS, Jordan and Tunisia; the requirements for the Kharif planting season are largely covered. China's import quota is expected to be in the range of 2 million tonnes in anticipation of high local production; the official announcement of the import quota will be end January. Indian importers have tendered for 50 000 tonnes.

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

  December January January Change from
2000 2001 2000 last year 1/
  ( . . . . . . . . . US$/tonne . . . . . . . . ) ( . percentage . )
eastern Europe 100-102 120-124 79-81 52.5
Near East 140-147 179-186 109-113 64.4
Ammonium Sulphate        
eastern Europe 47-50 54-57 42-43 30.6
Far East 65-69 70-72 55-56 27.9
U.S. Gulf 50-52 53-57 42-44 27.9
western Europe 55-60 60-65 55-60 8.7
Diammonium Phosphate        
Jordan 170-175 170-174 164-169 3.3
North Africa 159-169 158-168 159-164 0.9
U.S. Gulf 155-157 155-156 147-151 4.4
Triple Superphosphate        
North Africa 129-133 129-133 131-135 -1.5
U.S. Gulf 127-134 127-134 136-140 -5.4
Muriate of Potash        
eastern Europe 91-106 91-106 95-109 -3.4
Vancouver 116-130 116-130 117-131 -0.8
western Europe 115-122 115-122 129-137 -10.9

Prices for triple superphosphate (TSP) in January were about 5 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) have decreased somewhat compared to the same period in 2000 in Europe and Canada. Demand is expected to increase in Europe and the United States in the coming weeks for spring season planting. MOP demand in Latin America is increasing. The MOP import quota for China is expected around 5 to 6 million tonnes and several imports are scheduled in various South East Asian countries.

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