Fertilizer Market Report – November 1, 2023
Weak Canadian Dollar Good for Ag Exports but Bad for Ag Inputs
Fertilizer Market Report 2023/11/1
This week we are highlighting the weakness in the Canadian dollar. It is important in the agriculture sector as the weak CAD increases the value of farmers’ exports; however, that is offset by the increase in import prices, including that of equipment and inputs such as fertilizer. On Halloween, the CAD continued to weaken. As explained by Interchange Financial, “After staging a brief recovery against the USD on Monday, the Canadian dollar is once again losing traction against the US dollar on Tuesday morning. Also of note, the Canadian government’s 10-year bond yields have declined by 3.6 basis points, settling at 3.997%. In line with U.S. government benchmark debt which dipped to 4.8498%.”
In our view it is important to keep an eye on the CAD when budgeting for next spring.
News of the Week
St. Lawrence Seaway Strike Resolved
The St. Lawrence Seaway strike has been resolved and cargo is once again moving. This is good news for the Canadian agriculture sector.
India Urea Tender Settled on 1.7 Million Tonnes
IPL will import 1.7 million tonnes from 13 companies. According to czapp.com Fertimetrics, “on October 20, government agency IPL received offers at US$400/mt CFR West Coast of India and US$404/mt CFR East Coast of India. These numbers give Middle Eastern producers a netback of between US$384/mt and US$386/mt, which is substantially higher than netbacks provided for shipments to both Brazil and the US.”
For shipments from China, a netback of between US$386-US$387/mt FOB is estimated with freight rates to India of around US$17-US$18/mt. However, it appears that China’s National Development and Reform Commission (NDRC) has again implemented a halt to exports. It is therefore expected that only about four vessels will be participating in the India tender. The remaining tonnage for the India tender will come from Russia, North Africa and possibly Nigeria.”
In our view, this tender is likely to support urea prices globally going through Q4 and into Q1 2024.
North America Urea Last Week
According to Green Markets, urea prices in Western Canada were flat WoW in a range of C$740-C$770/mt DEL.
We heard of an offer of C$760 FOB South Saskatchewan.
Urea Eastern Canada was up WoW to C$710-$745/mt FOB from C$695-$725/mt FOB the previous week.
Last week, urea NOLA price range was down to US$345-$355/st from the previous week’s US$353-$365/st.
North America Phosphate Last Week
According to Green Markets, the latest MAP offers in Western Canada were flat WoW in a range of C$1,050-$1,060/mt DEL. We continue to believe that high input prices and potential supply disruptions will likely keep MAP prices elevated relative to historical averages here in Western Canada.
MAP prices in Eastern Canada increased to C$905-C$985/mt from C$880-C$915/mt.
The latest MAP NOLA prices were up slightly WoW to US$600-US$640/mt FOB from the previous week’s US$600-US$635/st FOB.
