|Global Market Analysis|
Urea spot prices remain substantially higher than they were one year ago and prices are expected to remain firm in the coming months. India’s urea import requirements look set to rise on account of strong demand in the wake of low domestic supplies. Facilities located close to ports in all major export regions continue to operate at full capacity. Local urea prices in China and Viet Nam have been increasing. Urea availability for export from China remains limited. In the United States production and inventories are higher than a year ago in anticipation of larger crop planting this autumn. In Japan, Pakistan and the Republic of Korea, urea application declined in the first half of 2007 compared with last year. There is little supply available from the Russian Federation and supply capacity from the Baltics might be further temporarily reduced.
Ammonia prices continued to fall in Asia and the Middle East while they showed firmness in the Black Sea region owing to a temporary dip in supplies. In the Ukraine, for instance, production suffered on the provisional withdrawal of production capacity. Europe is expected to augment ammonia imports from various sources, in addition to the supplies already secured from the Near East.
Diammonium phosphate (DAP) prices rose to a level not witnessed in the past ten years. Low DAP inventories and high crop prices are likely to trigger a rise in international demand. DAP demand has been particularly strong in India and Pakistan as both countries are in the process of securing adequate quantities for the winter season. In Pakistan, domestic supply capacity has been expanded by the deferral of earlier scheduled plant maintenance. In the United States, demand is expected to increase to meet winter planting requirements, while falling demand anticipated in Argentina and Brazil will slow down imports. Production in the United States shows little change compared with last year, but exports from the country have been considerably lower this year. Earlier, DAP imports by Brazil rose in response to increased demand. The sustained growth in China’s exports is unlikely to continue at the same pace in the foreseeable future due to the imposition of an export tax and the need to meet seasonal domestic requirements. Near Eastern and North African DAP supplies are on course to reach European destinations.The upward trend in international spot prices could be somewhat dampened by lower demand, but nevertheless, DAP prices are foreseen to remain firm in the short term.
Muriates of potash (MOP) prices in Europe are, on average, higher than they were last year and about one-third above the level quoted in North America. Domestic price increases in Brazil and Southeast Asia have been more dramatic. Demand in Europe remains strong. In India discussions are ongoing to set the fertilizer subsidy based on the fertilizer nutrient rather than fertilizer product. This may eventually lead to a wider range of fertilizer products available to the Indian farming community.
|GIEWS||global information and early warning system on food and agriculture|