Fertilizers: Overall decline in world prices in the first quarter of 2024


By
Mohamed Ben Abderrazek


| 1 hour ago

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Since the turbulence of 2022, the global fertilizer market seems to be regaining its momentum.

A relative lull was observed after a period marked by supply disruptions and trade restrictions. However, in the first quarter of 2024, a notable trend has emerged: a significant drop in global fertilizer prices.

Details of price fluctuations

According to the latest Commodity Markets Outlook report for April published by the World Bank, fertilizer prices fell substantially, recording a decline of 30% over the past quarter. This decline marks a notable change from the significant increases previously recorded.

A closer look at the data reveals that the price of the most common phosphate fertilizer, Diammonium Phosphate (DAP), recorded an average of $599.2 per tonne during the quarter, representing a decrease of 2. 8% compared to the previous year when it was listed at $616.5.

Potassium chloride (MOP) also saw a significant reduction in its rate, dropping approximately 40% to $295.4 per tonne. Similarly, Triple Superphosphate (TSP) and Urea prices fell by around 18% and 9%, respectively, to $451.3 and $338.9 per tonne.

Factors influencing the downward trend

The World Bank identifies several factors that explain this downward price trend. First of all, the reduction in prices of natural gas in Europe and coal in China played a major role. These two resources are essential in the production of ammonia, a basic ingredient for the manufacture of nitrogen fertilizers. The reduction in their costs thus encouraged an increase in ammonia production, contributing to the fall in fertilizer prices.

Additionally, despite Western sanctions, Belarus and Russia have maintained resilience in potassium chloride (MOP) exports, accounting for almost half of global production. Belarus has notably increased its shipments to China and redirected its cargoes towards Europe, thus compensating the disruptions caused by the sanctions.

Outlook for the end of the year

The World Bank predicts that the downward trend in fertilizer prices will continue until the end of the year. In particular, urea, phosphate rock and TSP are expected to close 2024 with lower levels than in 2023. Only DAP is expected to experience relative stability, although its price remains below the record recorded in 2022 .

The overall decline in global fertilizer prices in the first quarter of 2024 reflects an environment marked by significant changes in input costs and international trade dynamics. This development is expected to impact farmers and agricultural sector stakeholders across the world, highlighting the importance of closely monitoring fertilizer market trends in the coming months.

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