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FERTILIZER MARKET REPORT December 23, 2022

Urea NOLA Trying to Find Support – Down Another US$23/st Week on Week

THE WEEK’S TOP STORIES

• This is the last newsletter for 2022; see you on January 13!
• Urea NOLA looking for a bottom, falling 4.7% to an average US$460/st – lowest since June 2022.
• Urea Western Canada firm at average C$988/mt for third week in a row.
• Ottawa recently announced that tariff revenues received from Canadian farmers who bought Russian/Belarusian fertilizers this year are being sent to Ukraine to rebuild infrastructure.

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Global Fertilizer Market Growth Forecast from Market Research

The global fertilizer market is evaluated at US$200.097 billion in 2020, growing at a CAGR of 3.54% reaching a market size of US$255.290 billion by 2027.

Rapid urbanization and industrialization are some of the major factors responsible for the reduction of arable land as well as the quality and quantity of available resources such as land, air, and water, among others. As a result of the limited available resources, an increase in agricultural output is required, which has led farmers to increase their use of fertilizers primarily to increase output.

The global population has been rising constantly, and with the increasing global population as well as the urban population, the demand for nutritional food is increasing.

Another factor that is bolstering the growth of the fertilizer market is the increasing emphasis on sustainable farming practices across the globe. The use of synthetic fertilizers derived from fossil fuels has led to increased agricultural production on limited arable land across the globe. However, growing awareness and concern over their adverse effects on soil productivity and environmental quality is forcing scientists to discover alternatives such as fertilizers made from organic materials. The use of organic fertilizers leads to sustainable farming, thereby leading to food safety and sustainable crop production.

North America Urea Last Two Weeks

According to Green Markets, last week, new urea offers in Western Canada were reported at C$935-C$1,005/mt FOB and C$965-C$1,010/mt DEL, depending on location and time of shipment, flat week on week.

Early this week, Western Canada urea pricing fell to C$940-$970/mt DEL for 1Q, down from the prior C$965-$1,005/mt DEL range, though spring prepay urea offers were confirmed as high as C$1,025-$1,045/mt DEL in the region.

Also, earlier this week, a large fertilizer distributor/retailer in Saskatchewan once again dropped urea prices by another C$15/mt to C$930/mt for December and January.

Last week, NOLA urea barge prices retreated after a one-week rebound. New business was reported at US$445-US$475/st FOB, compared to the week-ago US$470-US$495/st FOB.

Early this week, NOLA urea price ideas were quoted at the lower end of the week-ago range of US$445-US$475/st FOB. 1Q offers in the Northern Plains were confirmed at the US$640/st DEL level, below the last US$670-US$690/st DEL prompt business.

North America Phosphate Last Two Weeks

Last week, delivered MAP prices firmed in Western Canada. New delivered pricing was C$1,165-C$1,200/mt in the region, up from the prior C$1,140-C$1,180/mt DEL range.

Last week, MAP barges were trading as high as US$640/st FOB for shipping December through February, above US$620/st FOB reported as the week-ago top. The low side was US$595-US$605/st FOB range.

Green Markets Global Macro Comments

India

According to Green Markets, another Indian tender is expected to be called in 2022. Prices in the tender are expected to be down from the current US$573-US$579/mt CFR to at least US$500/mt CFR. Some traders are even predicting prices sub-US$500/mt CFR. Sources said the government is probably anxious to call a tender as soon as possible, as importing urea is quickly becoming cheaper than what domestic producers can supply. Many of the older and less efficient plants are reportedly showing a production cost of $1,000/mt.

Brazil

Buyers continue to push for lower prices. Brazilian and international sources pointed to plentiful supplies on hand combined with limited buying interest as the reason prices keep coming off. Some international traders commented that they would not be surprised to see the bulk of the Brazilian market dip below US$490/mt CFR soon.

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Industry Tidbits

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• The Russian government has extended the quota for exports of mineral fertilizers to May 31, 2023, Tass has reported, citing a government decree. The total volume of the export quota will be just over 11.8 million mt.
• European Union (EU) ambassadors on Dec. 15 agreed on a compromise ninth sanctions package on Russia. Under the deal, individual EU Member States will be allowed to unfreeze the money of six Russian fertilizer and chemicals magnates if it is strictly needed to fund shipments of food and fertilizers, especially to Africa.
• Progressive Planet (PLAN), Kamloops, B.C., on Dec. 8 announced that it has joint development agreements with Eco Health Industries Ltd., Maple Ridge, B.C., and High Brix Manufacturing Inc., Leduc County, Alberta, to develop three regenerative fertilizers that will reduce chemical fertilizer use while increasing the soil’s ability to store CO2, allow producers to use their existing equipment, and align with the Canada’s national target to reduce GHG emissions from fertilizer application by 30% by 2030.

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