Review of Fertilizer Prices - June 2022

Review of Fertilizer Prices – June 30, 2022

Overview

Fertilizer prices have started to moderate after a substantial move higher earlier this year.

Biggest overall driver

The largest items impacting the fertilizer market is 1) recession fears impacting overall demand and 2) the Russsia-Ukraine War

Issue driving Nitrogen

China is expected to continue to restrict urea exports until April 2023.[1]  Nitrogen continues to have a relatively balanced supply and demand setup for the next year.  However, possibly the biggest issue will be the surging natural gas prices which will impact the cost of nitrogen.

Issue driving Potash

Potash availability to remain tight for the rest of 2022 and 2023.  Although Russian potash is finding a home (outside of North America and Europe, end users will buy Russian potash), Belarusian potash is landlocked and unable to be moved.[2]

Issue driving Phosphate

This sector of fertilizer is impacted by the export restrictions and quotas from China and Russia.  China continues to keep this market tight by limiting phosphate exports to 2 million tonnes (verses year over year  exports of 3.7 million tonnes for DAP and MAP)[3].  There is new phosphate supply scheduled to come on line in 2023.

Close: we have most likely seen the highs for fertilizer for the next couple of years.

Source: BMO Capital Markets – July 18, 2022