Fertilizer Market Report – September 20, 2023

Markets Volatile Following the Surprise Indian Urea Tender     

On September 13, India’s Rashtriya Chemicals & Fertilizers Limited (RCF) surprised the fertilizer market with an early tender for urea. That combined with China’s announcement that it will once again limit exports of urea pushed market prices up aggressively. Urea prices then settled down after a whopping 3.62mmt was offered into the tender with a lower-than-expected lowest offer price of US$400.50/mt CFR West Coast and US$405/mt CFR East Coast. The market was expecting prices in the US$412–US$420/mt range. This was in fact the most tonnage offered to India in the last three years.

No ‘Notable Disruption’ to OCP from Morocco Earthquake

Why do we care about OCP’s operations? Because OCP is the world’s largest phosphate producer. Disruptions to its operations would affect global phosphate supply which would eventually impact Canadian MAP prices.

Moroccan phosphates fertilizer major OCP has reported no impact to its facilities following the devastating earthquake that struck the country on Sept 8.

The firm’s production assets were unaffected by the earthquake, with no “notable disruption” to its production, supply chains or logistical activities, OCP said.

Vessel operations were delayed by less than a day at the firm’s Jorf Lasfar Atlantic hub as reported by Argus. Port operations were affected by up to 18 hours in the aftermath of the earthquake, traders said. But loading operations have returned to normal. OCP did not immediately comment on the reported delays, Argus Media reported.

North America Urea Last Week – Markets Volatile on Massive Volume Offered into India

Urea prices in Western Canada were flat WoW at C$755/mt DEL, according to Green Markets.

We are hearing urea C$795/mt FOB at retail in southern SK.

Urea NOLA prices fell to a range of US$390/st-US$408/st FOB last week, lower than the previous week’s US$390-US$450/st FOB range, according to Green Markets.

The current currency and unit measure adjusted spread of C$160/mt between NOLA and Western Canada is in the long-term range meaning we are not expecting and sudden moves in urea prices here in Western Canada if NOLA moves sideways.

North America Phosphate Last Week (prices provided by Green Markets)

According to Green Markets, the latest MAP offers in Western Canada were quoted at C$1,000-C$1,050/mt DEL, flat WoW.

We are seeing MAP at C$1,015/mt FOB in Southern SK.

The latest MAP NOLA prices were quoted at US$625-US$630/mt FOB, flat WoW, as per Green Markets,

International Commentary

Updates in ammonia market should be followed as ammonia is the feedstock for other fertilizers. Ammonia prices are often a leading indicator for other fertilizer prices.

In the ammonia market, prices in north Africa and southeast Asia rose by US$50-US75/mt as producers sold October cargoes at steep premiums to previous business.

The ongoing production outage in Saudi Arabia has brought several large buyers into the spot market. Overall, supply is severely restricted, pushing prices towards six-month highs at key supply hubs.

In Europe, prices have hit US$500/mt cfr, up by US$20/mt on the prior week’s close, raising the possibility of higher production rates as the spread widens between gas costs and import prices. (Source: Argus Media)

Industry Tidbits
    • Sollio Agriculture, the Agri-business Division of Sollio Cooperative Group, on Sept. 18 inaugurated CRF Agritech, a new controlled-release fertilizer production plant in St. Thomas, ON.
    • Tight Global Wheat Story is Stuck on Repeat, Supporting Market Bears, reported Reuters
    • It’s Time to Have a Mature Discussion About Water Management, a report from A Year in the Life of a Farmer
    • Iron Disease – In An Environment of High Equipment Costs, What Is The Solution?, reports Farmer Coach
    • Peek Inside America’s Largest Privately Owned Company, from Bloomberg