FAO/GIEWS - Food Outlook No.2 - May 2002 p.17

Fertilizers

Urea prices weakened somewhat in April. Prices in eastern Europe were about 2 percent down from a year earlier, while in the Near East they were down by about 6 percent. This trend was world wide as demand is insufficient to support prices. The EC is tendering for 10 million Euro for the Democratic Republic of Korea. Viet Nam is purchasing substantive quantities. China has announced its import quota for 2002: 1.3 million tonnes, but with a restriction of 600 000 tonnes for the first half the year, effectively closing the market until the next season. There is strong competition between the Arab Gulf and North African producers regarding Vietnamese and Sudanese markets. Venezuela is scheduled to return to full capacity urea production soon. Seasonal demand from Mexico and Peru is strong and Ecuador is entering the market. Part of this demand will be met from the Baltic Sea and part from the Latin American region itself. Libya has scheduled shipments to Italy and Turkey. Upcoming business in India will reportedly play a key role in the May pricing.

Ammonia prices have increased between 7 and 36 percent over the past two months. Freight costs are also increasing as bunker fuel prices increase. The Black Sea availability is tight and prices continue to firm. Jordan and South Africa tendered for large quantities. Increased demand is expected from South East Asia. In the United States prices have increased considerably due to an increase in gas prices, domestic production shut down and competition with the Black Sea.

Prices for ammonium sulphate were stable during March and April for eastern Europe and the US Gulf, but declined slightly in western Europe. They were between 15 percent to 22 percent lower than a year ago, except for the US Gulf where they remained stable. Demand for ammonium sulphate is 7 500 tonnes from Turkey.

Diammonium phosphate (DAP) prices remained stable over the past few months, except for the US Gulf, where prices are decreasing and domestic demand appear insufficient to underpin export prices. However, actual prices are 1 percent to 7 percent lower than during the same period last year. China’s import quota for 2002 is around 5.7 million tonnes of which 85 percent has been allocated to state trading organizations. India is importing 75 000 tonnes from Jordan. Pakistan has issued various tenders for large quantities. Viet Nam is purchasing large quantities from among others China, Tunisia and Indonesia. The market in Europe is slowing down as the season is coming to an end. CIS producers are supplying Europe and Turkey. Ethiopia is entering the market for 75 000 tonnes, while Kenya is understood to import 50 000 tonnes. Some Latin American countries are slowly entering the market, while Mexico is directing DAP to domestic demand and exporting to Australia and New Zealand.

Prices of triple superphosphate (TSP) remained stable in the first quarter of 2002. For North Africa prices are about 2 percent below those a year ago, while they are 4 percent above those for the US Gulf. Various countries in Latin America are importing TSP. Morocco is offering TSP into Europe.

Average spot prices of muriate of potash (MOP) remained unchanged in March/April. Prices were about 2 to 7 percent down from a year ago in western Europe and Vancouver, and remained at the same level in eastern Europe. As of 1 May producers intend to implement a price increase of about US$6 per tonne. China is purchasing around 250 000 tonnes since the beginning of this year. Most South East Asian countries have entered the market and consequently prices will remain stable. India is reportedly importing around 190 000 from Canada, Germany and Jordan. In the United States the spring season started slowly and the proposed price increase as per 15 April has not yet been implemented, as demand is poor. CIS producers are supplying Mozambique and the United States, while western Europe and the Philippines are importing from Jordan. Demand for potash in Brazil is slow, but in other Latin American countries demand has increased.

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