FAO/GIEWS - Food Outlook No.3 - June 2000 p. 10

Fertilizers

Urea prices strengthened somewhat over the past two months and average May prices were between 30 and 40 percent higher than a year earlier. This development reflects tight supplies due to continuing strong demand, in particular from Turkey and Latin America, which are importing from the Black Sea region. Prices for Black Sea origin urea reached their highest level for over two years. The upward trend in urea prices is expected to continue throughout June. As a result of the higher prices, where possible, many buyers will choose to defer purchases until later in the year, probably around July. The Baltic Sea region is supplying urea to Central America and South Africa. Near East suppliers committed their export availability to the Republic of Korea, Viet Nam, Sri Lanka, the Philippines and Myanmar. India reportedly issued a tender for 9 500 tonnes of urea in anticipation of the Government's decision regarding import requirements. Viet Nam has entered the market for considerable quantities. Producer problems and suppliers' uncertainty regarding June price developments has reduced urea availability from Indonesia. Urea demand in the United States is slow and resellers continued lowering their prices in the expectation that demand would increase for urea application on rice and pasture and to cater for the approaching cotton season.

Prices for ammonia have increased since the beginning of this year by about 30 percent. Supplies are tight due to the continued closure of two plants in Trinidad and rather tight availability in the Black Sea region. In southern Europe, demand for ammonia currently is strong. Demand in Taiwan and the Republic of Korea is being met by the Arab Gulf. In Mexico, where two plants are operating, output is matching domestic demand and Mexico is neither exporting nor importing.

Prices of ammonium sulphate remained mostly stable over the past two months. However, compared to a year ago, prices in eastern Europe are down by about 8 percent, while US Gulf prices are up by 50 percent. Turkey and India are active in the market, seeking imports of 4 000 tonnes and 25 000 tonnes respectively from the Black Sea region.

Diammonium phosphate (DAP) prices also remained virtually unchanged during April and May, and are about 23 percent lower than a year ago. India is importing DAP from Mexico, Morocco, Jordan and the United States. In China, stocks are reported to be low due to reduced imports in the first quarter of 2000. Its quota issue for DAP imports this year is 4 million tonnes. In Pakistan the current inventory is expected to cover the demand in the Kharif season and import requirements for the Rabi season are estimated at about 450 000 tonnes. Bangladesh, Indonesia and Viet Nam are scheduled to arrange procurement of large amounts of DAP. DAP demand in Europe is weak. Turkey and Syria are entering the market. Morocco has export commitments to India and China. Jordan producers have scheduled exports for Malaysia and India. Demand for DAP from Argentina, Brazil and Chile is strong and involves a substantial volume of material.

Prices of triple superphosphate (TSP) from North Africa and the US Gulf were stable over the past four weeks. Prices from both origins are about 16 percent to 17 percent lower than a year earlier. Brazil is importing TSP from Israel.

Average spot prices of muriate of potash (MOP) remained generally stable over the past two months. Average May prices in eastern and western Europe were about 3 percent and 11 percent lower than a year ago respectively. Shipments to China from the CIS and Baltic States and Canada have been large. Indonesia is importing considerable amounts of MOP from Jordan. MOP imports in India have been suspended pending a decision on subsidies. Regular demand for potash in Latin America, Malaysia, the Philippines and Thailand 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.