Fertilizer prices fell 20% on 1er quarter 2024 and are below at a level almost 30% lower than the same period in 2023, according to the World Bank Fertilizer Price Index. Thus, in March, the fertilizer accessibility index (the fertilizer price/food price ratio index) reached its average level for 2015-19. The Bank estimates that prices are expected to weaken further in 2024 and 2025 but remain above 2015-19 levels due to robust demand and export restrictions, notably from China. However, the evolution is contrasted depending on the fertilizer.
The Potassium Plunge
After falling by 56% in 2023, the prices of MOP (muriate or potassium chloride), they lost 10% on 1er quarter of 2024 and are expected to fall by another 22% over the whole year, before stabilizing in 2025 with the strengthening of demand, estimates the World Bank. Belarus and Russia, which represent almost half of global MOP production, have managed to export despite the sanctions imposed with alternative solutions. So, for example, Belarus has increased exports to China. At the same time Canada’s exports were diverted to Europe.
Urea prices had also fallen sharply in 2023, losing 50% of their value and losing 12% in 1er quarter of 2024. They should further decrease over the rest of the year but to a lesser extent, -2%, but fall again in 2025 (-7%) with the resumption of production, especially in Europe following reductions of production after the surge in natural gas prices in 2022. In the longer term, the World Bank highlights the issue of the high carbon content of urea.
Phosphate strength
On the other hand, prices of DAP (diammonium phosphate) increased by 10% in the 1st quarter of 2024 and are very slightly lower (-3%) than their level a year ago. While prices are heavily influenced by the price of natural gas, the fertilizer’s recent strength is mainly due to export restrictions on phosphate from China and ammonia from Russia. After plunging by almost 30% last year, DAP prices are expected to rise 9% in 2024 before falling in 2025 as supplies resume and new capacity comes online, the World Bank estimates.
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