Fertilizers

Average Urea spot prices in April and May continued to be substantially higher than those of a year ago. In north China domestic urea prices declined and exports to Viet Nam are envisaged. Import demand from India will continue at normal level, although supply for this source may be tight if an anticipated temporary reduction in supplies from the Russian Federation and Ukraine materializes. Exports from the Russian Federation are scheduled for Latin America and Europe. High shipping rates through the Suez Canal make Asian and Arab Gulf supply to the Asian market likely. Indonesian exports have focused on Viet Nam and the Philippines. High natural gas prices in the United States affected domestic supply capacity and demand there will be met through imports from the Arab gulf and Asia. Expanded production capacity in Venezuela is expected to become operational in the near future, supply is initially envisaged for the domestic market and exports in the longer term for Europe a Latin America. There is little price change expected shortly.

Ammonia prices declined in May in all markets, in particular the Caribbean and eastern Europe. India is expected to import ammonia for its restarted DAP facility, but other demand is slow. The Philippines secured supply from Indonesia. In the United States seasonal demand has been met through imports from the Russian Federation and the Caribbean.

International spot market prices of ammonium sulphate from eastern Europe are considerably above the level of 2002, prices from western Europe are somewhat below last year's level.

Diammonium phosphate (DAP) prices continued to increase in the past two months and are substantially higher than a year ago. This increase is expected to reverse in the near future as most demand drops off. However, sustained demand from Latin America and Turkey may slow down the price decline somewhat. In response to falling demand, North African producers decided to align contractual future delivery obligations with supply capacity. Exports are primarily directed towards Pakistan, the Islamic Republic of Iran and Latin American markets. United States exports are impeded by enhanced freight rates. United States domestic demand is adversely affected by wet weather in the central wheat belt. United States supply capacity may decrease also considering relatively high ammonia prices, which relates to the natural gas price. Imports are restrained in anticipation of further DAP price decline.

Prices for triple superphosphate (TSP) have increased. The Islamic Republic of Iran imports a large volume of TSP to supplement its DAP imports from North Africa. Demand in Bangladesh and Sri Lanka is expected to be met through imports from China. Chile is expected to enter the market. European supply is almost in balance with supply and TSP prices are expected to remain stable. Italian demand is being met from eastern Europe.

Muriate of potash (MOP) prices remain almost at the same level as a year ago. Stocks in China fell below 1 million tonnes and shipments to China will come to an end shortly at the conclusion of the growing season. North American and the Russian Federation potash exports are now directed towards Thailand and Viet Nam. United States demand is met through imports from the Russian Federation. Potash supply from the Near East has been constrained by logistics limitations in the ports. The Russian Federation suppliers envisage meeting Brazilian potash demand; seasonal stocks are much below last year's level. Potash prices may show marginal changes.

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