Fertilizer Market Report –November 21, 2024
India’s Urea Sales Regain Momentum in November
Fertilizer Market Report – November 21, 2024
In this week’s fertilizer report: Indian Urea Tender Sees Slightly Softer Prices; Argus Media: India’s Urea Sales Regain Momentum in November; Itafos Q3 Earnings Outlook; Rabobank: Field crop margin outlook: A new cycle of tighter margins ahead; Last Week’s North American Urea and Phosphate Action; and Other Industry Tidbits.
News of the Week
According to Green Markets, Indian Potash Ltd. (IPL) closed its urea tender on Nov. 11 with 23 companies offering 2.3 million mt. The lowest price offered was for 225,000 mt at US$362/mt CFR which is US$2.50/mt lower than the last tender price for West Coast deliveries.
Argus Media: India’s Urea Sales Regain Momentum in November
This is important because it could prompt another tender from India which would soak up more supply.
India’s domestic urea sales are on track to hit around 3.4mmt this month, rising from 3.2mn t a year earlier, with offtake set to be a key determinant of the timing of the country’s next import tender.
India’s urea sales regain momentum in November
Itafos Q3 Earnings Outlook
Phosphate pricing increased in Q3 2024 following a rebound from late spring and early summer reset pricing in Q2 2024. Throughout the fall application season, prices have largely remained resilient due to a lack of inventory in the market, good fall and winter on-farm demand, and supply disruptions due to the hurricanes in the Southeast US. Moving forward, the Company expects relatively flat pricing through Q4 2024 and into Q1 2025 as demand should remain strong and inventories low.
Specific factors the Company expects to support pricing in the global phosphate fertilizer markets through the end of 2024 are as follows:
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Low inventory levels in the North American market and continued strength in global demand;
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Ongoing export restrictions from China; and
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No significant adjustments in global trade flows, particularly to the North American market.
Itafos Continues Momentum, Reporting Strong Q3 2024 Results
Field crop margin outlook: A new cycle of tighter margins ahead
Agri commodity prices have moved downward since late 2023. Farmers will likely see tight margins for the next two to three years, leading them to reduce operating costs.
Agri commodity markets are inherently cyclical, driven by the forces of supply and demand. Since the end of 2023, row crop markets have shifted from a high to a low phase, bringing significant distress to the market, pressuring margins. This transition follows a period of elevated commodity prices that began around Q4 2020, when a contraction in ending stocks, due to production losses in the US and Argentina, led to a surge in prices. For instance, soybean prices rose sharply, surpassing USD 10/bushel in October 2020 and reaching USD 15.72/bushel by May 2021, significantly higher than the average price of USD 9.47/bushel observed between 2015 and 2020. Corn prices experienced a similar upward trend.
Field crop margin outlook: A new cycle of tighter margins ahead
North America Urea Last Week
According to Green Markets, urea prices in Western Canada were flat WoW in a range of C$$695-$700/mt for the second week in a row. Canada has had a few headwinds in the urea market lately – 1) the North American market is tight which allows Canadian producers to maintain prices; and 2) the Canadian dollar is going against us making imports more expensive.
Urea price range in Eastern Canada jumped to C$612-$645/mt FOB, up from the previous low of C$592/mt FOB.
Last week, the NOLA urea price range tightened slightly to US$308-$315/st from US$307-$318/st the previous week.
According to Direct Hedge, the week started with urea Nola spreads of US$310/st bid and US$315/st offer for November. December was quoted at US$318/st bid and US$323/st offer. January was US$320/st bid and $330/st offer and Q1 was US$325/st bid and US$335/st offer. All of these spreads were higher relative to last week’s quotes.
North America Phosphate Last Week
According to Green Markets, the latest delivered Western Canada MAP prices settled flat WoW in a range of C$1,120-$1,160/mt from. MAP supply remains tight across North America as indicated in the commentary above from Itafos.
MAP NOLA prices settled at US$635/st from a range of US$635-$645/st the previous week.
Industry Tidbits
