FAO/GIEWS - Food Outlook No.2 - April 2001 p. 11

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Urea prices weakened somewhat in March. However, prices from these origins remain well above their values a year earlier in eastern Europe (+15 percent), while in the Near East they decreased by 7 percent. In Indonesia, a number of plants had to stop urea and ammonium production as due to unrest gas and oil production was shut down. This kept prices firm in South East Asia and the Near East. China will reportedly export to South East Asia. The Arab Gulf is supplying large quantities to Viet Nam, Sri Lanka, Canada, the United States, the Republic of Korea and Australia. There is strong competition between the Black Sea and the Baltic Sea producers regarding Latin American markets. Argentina stopped production and Brazil has not yet restarted its urea plant, while there are still difficulties in Venezuela with urea production. Prices might strengthen from late March onwards when seasonal demand could develop from Latin America, but the demand is not sufficient to sustain present levels. The Peruvian government has levied import duties on urea, so importers have returned to the market. The Turkish market is still dormant as there is a currency devaluation crisis. Adverse weather conditions in Southern Europe reduced the demand significantly.

Ammonia prices have decreased between 9 and 16 percent over the past two months and are expected to decline further. High inventories in the United States and in the Black Sea continue to depress prices. Increased demand is expected from India, Morocco, the Philippines, Taiwan and the Republic of Korea. India is reportedly planning to build an ammonium plant in Australia.

Prices for ammonium sulphate were reasonably stable during February and March but were between 18 percent to 45 percent higher than a year ago. Demand for ammonium sulphate is 10 000 tonnes from Sri Lanka and 8 000 tonnes from Thailand.

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

  2001 2000 Change from
February March March last year 1/
  ( . . . . . . . . . . . US$/tonne . . . . . . . . . . . . ) ( . percentage . )
eastern Europe 102-106 97-99 84-86 15.3
Near East 147-154 122-125 132-134 -7.1
Ammonium Sulphate
eastern Europe 60-64 59-61 41-43 42.9
Far East 67-70 70-73 60-61 18.2
U.S. Gulf 55-60 60-65 43-45 42.0
western Europe 70-75 70-75 55-60 26.1
Diammonium Phosphate
Jordan 169-173 169-172 159-164 5.6
North Africa 162-171 165-171 149-158 9.4
U.S. Gulf 164-166 166-168 146-150 12.8
Triple Superphosphate
North Africa 128-132 125-130 126-131 -0.8
U.S. Gulf 127-134 127-134 135-139 -4.7
Muriate of Potash
eastern Europe 91-106 91-106 92-111 -3.0
Vancouver 116-130 115-130 117-131 -1.2
western Europe 115-122 115-122 115-122 0.0

Diammonium phosphate (DAP) prices remained stable over the past few weeks. However, prices are 5 percent to 13 percent higher than during the same period last year. In China 940 000 tonnes are being moved from the warehouses to the northern provinces and about 1.5 million tonnes will reportedly be imported. India is importing 75 000 tonnes from Jordan. The Government of Pakistan has postponed the implementation of the 15 percent sales tax on fertilizers as farmers are already in difficulties due to the prolonged drought. The government has not yet announced the new 10-year fertilizer policy. Viet Nam has high stocks and suppliers are selling below international market prices because of weak domestic prices. Imports are expected to be low because of decrease in acreage in the Mekong Delta and low export prices for the crops. In the United States DAP production was cut by 26 percent and domestic demand supported prices while there were no exports. The market in Europe is generally slow due to adverse weather. CIS producers are supplying Europe and Turkey. Ethiopia is entering the market for 75 000 tonnes, while Kenya is understood to import 50 000 tonnes. Some Latin American countries are slowly entering the market, while Mexico is directing DAP to domestic demand and exporting to Australia and New Zealand.

Prices of triple superphosphate (TSP) remained stable in early 2001. For both North Africa and the US Gulf prices are about 1 percent and 5 percent below those a year ago. Morocco and Tunisia are exporting 30 000 tonnes each to the Islamic Republic of Iran.

Average spot prices of muriate of potash (MOP) remained unchanged in March. Prices were about 1 to 3 percent down from a year ago in eastern Europe and Vancouver, and remained at the same level in western Europe. China has purchased over 3 million tonnes since the beginning of this year. Most South East Asian countries have entered the market and consequently prices will remain stable. Importers in Japan have reached an agreement on supply arrangements with Canadian exporters. India closed a tender for 25 000 tonnes. In the United States producers hold out for higher prices in early spring. CIS producers are supplying Mozambique and the United States, while western Europe and the Philippines are importing from Jordan. Demand for potash in Brazil is slow, but in other Latin American countries demand has increased.

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