FAO/GIEWS - Food Outlook No.2 - April 2000 p. 13

FERTILIZERS

Urea prices weakened somewhat in March in eastern Europe, but remained stable in the Near East. However, prices from these origins remain well above their values a year earlier (eastern Europe: +16 percent, Near East: +45 percent), when generally abundant export supplies exerted downward pressure on markets. Prices might strengthen from late March onwards when seasonal demand could develop from Latin America. There is an increasing amount of urea in storage in the Ukraine and future price developments will remain sensitive to changes in supply. Black Sea producers have been selling to Near East and Latin American destinations. In Asia, Indonesian producers expect that demand from the region will support prices. Viet Nam has not yet entered the market, awaiting for any possible further erosion of international prices, but is expected to begin buying again by end-April/May. In India, the Government has decided to reduce the subsidy on urea and its price has risen by 15 percent. New urea projects are banned for three years. Pakistan producers have received government clearance to export 100 000 tonnes. In Latin America and the Caribbean, Argentina, Chile and Nicaragua have entered the market for 25 000, 7 000 and 22 500 tonnes respectively. In Mexico two new urea plants will start producing by end March; meanwhile Mexico imports from the Baltic Sea to satisfy the domestic market. Brazil is reportedly waiting for the reduction of import duties from 9 percent to 6 percent for all types of fertilizers before entering the market.

Ammonia prices from most origins have continued to increase over the past two months due to production cutbacks in the Caribbean and tight supplies in Asia. Prices remained unchanged in the Ukraine. Increased demand is expected from Morocco, Taiwan and South Korea. The start-up of a new ammonia plant in Indonesia, to increase its production capacity, has been delayed.

Prices for ammonium sulphate were stable or increased slightly in March to between 5 percent to 27 percent higher than a year ago. Ammonium sulphate import demand from Malaysia is 57 000 tonnes and 15 000 tonnes from Thailand. In the Republic of Korea, the availability for export is tight due to the ongoing high domestic demand.

Diammonium phosphate (DAP) prices remained stable over the past few weeks. However, prices are 20 percent to 24 percent less than during the same period last year. Demand is declining in Australia, China has reportedly not entered the market and India is unlikely to import before the subsidy issue is settled. Pakistan is importing 30 000 tonnes. In the United States, domestic demand is picking up as the better spring weather arrives. Exports from CIS countries are scheduled for Europe, Thailand, Pakistan, India and Latin America and the Caribbean. Bangladesh will not import as inventories are high. In the Ukraine the Government has approved the domestic fertilizer delivery programme. Tunisia is exporting to France and Italy.

Prices of triple superphosphate (TSP) remained stable in early 2000. For both North Africa and the US Gulf prices are about 16 percent to 18 percent below those a year ago. Morocco is exporting to Italy and France.

Average spot prices of muriate of potash (MOP) remained unchanged in March. Prices were about 2 percent and 10 percent down from a year ago in eastern and western Europe respectively, and approximately the same in Vancouver. The market remains basically in balance with Canada and CIS shipping large volumes to China, which is importing about 5.1 million tonnes in 2000. Most South East Asian countries have entered the market and consequently prices will remain stable. Importers in Japan have not yet reached an agreement on supply arrangements with Canadian exporters. As for DAP, India is waiting for the new rates on subsidies for MOP after having imported 2.1 million tonnes in January. In the United States significant spring buying has not yet taken place. Europe is awaiting the EC anti-dumping review on potash originating from CIS. Demand for potash in Brazil, Colombia, Ecuador, Honduras and Venezuela may support present levels of potash prices.

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

Source: Compiled from Fertilizer Week and Fertilizer Market Bulletin.
1/ From mid-point of given ranges.