Nitrogen fertilizer prices are on the rise

Urée

The war in Ukraine continues to drive up the prices of nitrogen fertilizers, also catalyzed by increases in the prices of urea from the Maghreb and the Middle East and by the rise in freight costs. While almost 40% of Terre-net readers were not covered at the end of July for the 2022/23 campaign, the situation is worrying in the plain.

UreaUrea prices have been on the rise since mid-June (©AdobeStock) LNitrogen fertilizer prices continue their upward movement observed since the beginning of July. On August 12, theurea departure port thus cost €805/t, 27% ammonium nitrate ex-factory €700/t and 33.5% ammonium nitrate ex-factory €880/t.

A situation that saddens farmers, especially since grain prices are heading down and raise fears of a “scissors effect”.

“I covered myself on Monday (July 25, editor’s note). I already had 1 semi of solution and a semi of 21/4/4+12 S. There, I put my PEL, my booklet A and my DAT in cardiac arrest with another semi of liquid at 616 €/t , a semi-urea in BB €798/t and a semi-sulfur ammo in BB at €733/t,” wrote @cpelleraud on Twitter, for example, at the end of July.

“I bought everything for my N39 at 600 euros, I feel like I got a deal. As a reminder I had bought 150 in 2020 and 300 in 2021. At this rate, next year I’ll buy it at 1,200? asks @michuipasbiau.

@leskyanous for his part bought “4 trucks at €823/t of ammo 33.5 + a truck of urea at 890… After buying last year at almost 720 on average… I am immune to prices now… “. “Not me!, replies @bubu1664. The €15,000 more, I do not digest them yet. Well, now we have to prepare for 2023 as well as possible and have good crops”.

According to a survey proposed from July 19 to 26 on Terre-net, just over 21.4% of readers were then covered in nitrogen fertilizers for the 2022/23 campaign, while around 39% were not covered at all.

And you, what is your coverage rate? Do the prices cause you to change your buying strategy nitrogen fertilizer? How do you envision the 2022/23 campaign?

The war continues to put pressure on the markets

Why have the ammonium nitrate and urea markets remained in recent days “under high tension in Europe”, as Marius Garrigue writes on Terre-net? This is a direct consequence of the war in Ukraine: Russia continues to limit European supplies of natural gasthe basis for the manufacture of nitrogen fertilizers.

Russian gas exports to EuropeRussia’s gas exports to Europe have fallen to their lowest level in 40 years (©US energy information administration) This generates “a shortage and a surge in prices which paralyzes part of the industry of the Old Continent”, explains the expert. The instability of Russian gas deliveries and the high volatility of energy prices have in fact “caused thestopping a large number of lines of production” in the European Union.

As of July 21, urea production in the EU was already down 40% compared to the pre-war situation according to Icis, a specialist in the energy and chemical products markets.

How will the prices evolve?

Other factors contribute to the rise in nitrogen fertilizer prices, notes Marius Garrigue: “the exporters of urea from the Maghreb and the Middle East are rapidly increasing their prices”, and “the rise in the cost of freight further amplifies inflation.

While sales and purchases resumed at the end of July/beginning of August – European buyers notably placed orders for Egyptian urea – the market is rather wait-and-see over the past few days: “price volatility and uncertainties regarding medium-term production costs do not encourage commitments”.

Prices could nevertheless continue to climb and even blaze “As soon as Europe wakes up (in terms of purchases, editor’s note), according to analysts from the CRU group.

To monitor changes in fertilizer prices, log on to The agricultural markets of Terre-net.fr

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