Economic and Social Department

 global information and early warning system on food and agriculture

 food outlook
No. 4 Rome, September 2003

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Cereals: Supply/Demand Roundup

Cereals: Current Production and Crop Prospects

Cereals: Trade

Cereals: Carryover stocks

Cereals: Export Prices


Appendix Tables



Spot prices of urea from most origins in international markets increased over the past two months. August prices in eastern Europe were 46 percent up compared to those a year ago and those in the Near East were up by about 27 percent. In the Black Sea prices have been increasing and appear overpriced in comparison with other sources. However, unsold quantities in the hands of traders put a halt to the surge of prices. This is also the case in the Baltic Sea. FAO intends to purchase 350 000 tonnes for Iraq. This will have an implication on the market. India might enter the market to secure quantities in advance of the main Viet Namese purchasing. Latin America’s demand is slow as most of its immediate urea needs are met. There is a shortage of urea in the Arab Gulf as most urea is booked and South East Asian producers are entering the Near East market. China and Indonesia are supplying South East Asia and are increasingly also entering the North America and Latin America market. The European market remained relatively low, though there is interest in purchasing before the new duty legislation in October comes into force.

Ammonia prices increased in August by 11 percent. Spot buyers in the Indian sub continent are facing high prices due to availability in the neighbourhood and limited competition. There is a wide price gap between the prices from the Arab Gulf and the Black Sea. Ammonia prices in the United States also increased and the differential between imports relative to gas cost of production might widen further. There is large demand from southern Europe, South Africa and South East Asia. China will reportedly not enter the market at the current high prices.

International spot market prices of ammonium sulphate are considerably higher than in 2002, especially in eastern Europe. India is purchasing significant amounts.

Diammonium phosphate (DAP) prices increased between 9 and 12 percent compared to the same period last year, but only slightly in the last two months. Import demand in Latin America is uncertain. Chinese suppliers met Pakistan DAP demand. In the United States raw material costs have increased and their DAP prices are not competitive, therefore there is very little spot interest from nearby countries. India might be a potential buyer. China has made contractual arrangements for DAP shipments from the United States. Tunisia is supplying southern Europe. In India the costing mechanism of domestically produced DAP has not been defined yet and modification of the DAP subsidy is expected. Pakistan will reportedly be supplied by China. FAO is tendering for 140 000 tonnes for Iraq. DAP supply capacity from North Africa and Jordan in the near future might be limited. Strong demand from Viet Nam is expected to be met from the Russian Federation. In Europe seasonal demand is uncertain, supply might originate from eastern Europe.

Muriate of potash (MOP) prices in eastern Europe and North America are almost equivalent to those one year ago. MOP availability is limited from Canada and the Russian Federation. Supply capacity from Canada and Israel is scheduled to increase in the near future. The demand from Brazil slows down. Brazil and the United States were proposing price increases of US$5 and 10 per tonne respectively. Freight prices have also risen. In India stocks are low and consumption is running at about 200 000 tonnes a month. Demand may increase because of the favourable weather. However, India is still negotiating about the price increase due to freight. Demand in South East Asia is strong. The Baltic Sea is supplying Côte d’Ivoire. Demand from China is being met by Jordan on a three year contract.

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

 JulyAugustAugustChange from
 200320032002last year 1/
eastern Europe137-140145-148100-10145.8
Near East145-149148-152117-11927.1
Ammonium Sulphate    
eastern Europe56-5856-5840-4239.0
western Europe50-5550-5546-50 9.4
Diammonium Phosphate    
Jordan193-196197-198179-182 9.4
North Africa183-189185-192166-16812.9
U.S. Gulf179-182180-181169-170 6.5
Triple Superphosphate    
North Africa152-156154-157130-13318.3
U.S. Gulf149-153154-158132-13317.7
Muriate of Potash    
eastern Europe89-10489-10492-107-3.0
western Europe100-110100-110105-115-4.5
Source: Compiled from Fertilizer Week and Fertilizer Market Bulletin. 1/ From mid-point of given ranges.

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